Toyota Faces Billions in Losses Due to US Tariff Policies

Toyota, the largest automobile manufacturer in the world, has reported significant financial impacts stemming from the US tariff policies. The company has estimated that the costs associated with these tariffs will reach approximately EUR1.1 billion, equivalent to around 180 billion Japanese yen, during the months of April and May alone.

As the company prepares for the new fiscal year, which concludes in March 2026, Toyota anticipates an operational profit of 3.8 trillion yen (approximately EUR23.4 billion). This figure falls short of analyst expectations, which had averaged around 4.7 trillion yen. In the previous fiscal year, Toyota's operational profit decreased by 10% to 4.8 trillion yen.

In the US market, Toyota has a substantial presence, having sold 2.7 million vehicles in North America last year, accounting for nearly a quarter of its global deliveries. In contrast, Volkswagen, with all its brands combined, sold just under 1.1 million vehicles in the US in 2024. However, Toyota's profitability in North America has sharply declined, with its operational profit plummeting by 80% to 104 billion yen (around EUR640 million) last year.

Looking ahead, Toyota aims to increase its vehicle deliveries to consumers, including those from its Chinese joint ventures, from 11 million to 11.2 million in the current fiscal year. Despite this expected growth in sales volume, the company forecasts a significant drop in profits. After a nearly 6% decrease in operational profit to 4.8 trillion yen last year, projections indicate that profits may fall to 3.1 trillion yen in the new fiscal year.

Despite these financial challenges, Toyota plans to increase its dividend payments. For the last fiscal year, the total dividend was set at 90 yen, which is an increase of 15 yen compared to the previous year, and for the upcoming year, the total payout is expected to reach 95 yen. However, the company has indicated that it currently does not have a budget for stock buybacks, stating that any future buyback programs would be initiated on a flexible basis.

Overall, Toyota's financial outlook reflects the broader challenges faced by automakers operating in the increasingly complex global trade environment.