Toyota Targets JPY 50 Trillion Sales in FY2026 Despite $1.45 Trillion Tariff Hit

Toyota Motor projects its consolidated revenue for the fiscal year ending March 2026 to reach JPY 50 trillion for the first time, supported by strong global demand—particularly in Japan and North America.

Despite headwinds from U.S. tariffs, the company continues to strengthen its competitiveness through cost improvements and productivity enhancements, building a stable foundation for long-term growth.

Upward Revision in Revenue, While Profit Declines YoY

Toyota has revised its revenue forecast upward by JPY 1 trillion from its November 2025 outlook to JPY 50 trillion, representing a 4.1% year-on-year increase.

Operating profit is now projected at JPY 3.8 trillion, down 20.8% YoY, but improved by JPY 400 billion from the previous forecast.

Revised exchange rate assumptions:

• USD: JPY 150 (–4 yen)
• EUR: JPY 174 (–5 yen)

U.S. Tariffs to Impact Profit, Offset by Cost and VC Growth

The impact of U.S. tariffs is estimated to reduce full-year operating profit by approximately JPY 1.45 trillion.

However, this will be partially offset by around JPY 900 billion in positive factors, including:

• Cost reduction initiatives
• Sales and pricing strategies
• Growth in value chain (VC) businesses such as after-sales services, used cars, and spare parts

9-Month Results Show Solid Revenue Growth

For the April–December 2025 period:

• Revenue: JPY 38.876 trillion (+6.8% YoY)
• Operating profit: JPY 3.1967 trillion (–13.1% YoY)

Strong global sales, along with cost reductions and pricing adjustments, helped maintain a high level of performance.

Electrified Vehicles Drive Growth

YoY.

Electrified vehicles accounted for 46.9% of total sales, with key breakdown:

• Hybrid vehicles (HVs): 3.459 million units
• Battery electric vehicles (BEVs): 164,000 units (+49.8% YoY)

Demand remained particularly strong in North America and China, especially for hybrid models.

Focus on Lower Break-even Point and Long-term Resilience

Toyota aims to lower its break-even volume to enhance resilience against external risks such as tariffs and economic volatility.

The company is strengthening its competitiveness through:

• Cost improvements
• Expansion of VC profits
• Reduction of fixed costs

These efforts are expected to support sustainable earnings growth in the long term.

Source: Nikkan Kogyo Shimbun