Toyota Braces for 3rd Consecutive Annual Profit Decline

Tokyo, May 8 (Jiji Press)--Toyota Motor Corp. said Friday that its net profit in the current business year is expected to fall for the third consecutive year amid the harsh business environment due to the deteriorating situation in the Middle East.

For fiscal 2026, which started in April, the leading Japanese automaker projected a consolidated net profit of 3 trillion yen, down 22 pct from the previous year, and an operating profit of 3 trillion yen, down 20.3 pct. Sales are forecast to increase 0.6 pct to 51 trillion yen.

Toyota estimated that higher material costs and other factors caused by the Middle East situation will reduce its profits by 670 billion yen for the current year. In addition, higher U.S. tariffs imposed by the administration of President Donald Trump are expected to continue weighing on its earnings.

During an online press briefing, Toyota President Kenta Kon, who took office last month, explained that the automaker has been working to reduce costs and improve productivity. He indicated that the company will continue growth-oriented investments despite the challenging business environment.

The Middle East turmoil is expected to raise the prices of crude oil and oil-related products while blocking auto exports to the region. Toyota estimated profit decreases of 400 billion yen resulting from growing costs attributed to higher fuel and material prices and 270 billion yen from lower vehicle sales in the Middle East and other regions.

[Copyright The Jiji Press, Ltd.]