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Toyota warns that President Donald Trump’s fallout from the trade war will reduce this fiscal year by 21%, increasing pressure on Japan to reach a tariff contract with the US.
In the year ending in March 2026, the world’s largest automobile manufacturer of vehicles sold said it had expected operating profit of 380 million yen ($26 billion), while 4.8 tons ($26 billion) this year has ended. The “tentative” forecast includes an impact of estimated US tariffs for the April and May months of ¥180 billion.
Sato Sato, CEO of Toyota, said that Japanese government officials “we are working hard right now and the details of the tariffs are still moving, so predicting the future remains very difficult. However, tariffs are already being imposed at this time, and that portion is reflected in this year’s forecast.”
“In the short term, you need to consider how you allocate your car. However, in the medium to long term, you need to produce the right local product locally and deliver it locally,” he added.
Chief Financial Officer Miyazaki Yoazaki said automakers can raise prices based on demand rather than making “hasty” decisions.
“To date, customer demand has been very strong and in the past we have been raising prices when demand is high,” he added.
The US President recently offered relief to the automaker to ease the impact of his 25% tariff on imports of foreign-made cars and parts.
But the evolving nature of Trump’s taxation has plunged the global automotive industry into chaos, with Mercedes-Benz, Volvo cars and Ford pulling out this year’s leadership, and General Motors warning of a hit of up to $5 billion from tariffs.
According to a Bernstein survey, Japanese manufacturers sell some of the vehicles sold in the US from Japan, leaving Toyota exposed as they source about 26% of the vehicles sold from their home countries.
While some automotive executives are hoping for more Trump concessions, BMW CEO Oliver Gyps predicts that tariffs could be reduced by 25% from July on Wednesday.
The US will also announce a new trade agreement with the UK that could grant a low tariff allocation on UK automobile and steel exports. Japanese officials also show that they can reach a trade agreement with the US in June.
In the fourth quarter, Toyota’s operating profit was nearly 1.2TN per year, with revenue rising 12% to 12.3TN.
While Toyota is tackling the impact of tariffs, Japan’s biggest company is also considering a $42 billion move to make its major subsidiaries private.
According to people close to the discussion, Akio Toyoda, the grandson of Toyota founder, is considering investing personal money to lead the acquisition of Toyota industry, which makes industrial equipment and vehicles.
Toyota Motor, which has a complex set of cross-share holdings with its subsidiary, is considering investing the same people when it becomes one of the world’s biggest acquisitions.
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The move, revealed last month, sparked speculation that other large industrial groups would accelerate debate about potential acquisitions and acquisitions of listed subsidiaries.
Toyota Industries stocks have risen sharply in the news, rising 36.5% this year. Toyota Motors have been decreasing slightly over the same period.
The Tokyo Stock Exchange is putting pressure on companies to maintain significant stakes in subsidiaries with major industrial groups listed, and to address the so-called parent-child list, where Toyota’s moves could drive more action.
On Thursday, Telco NTT said it would hold a board meeting later that day to discuss the potential public offering of shares it does not yet own in its subsidiary NTT Data, one of the world’s largest operators of data centers. The transaction could be valued at nearly $20 billion.
