The world's largest carmaker Toyota Motor is expected to suffer a major loss due to former US President Donald Trump's tariff policy. The company has projected a 21 percent drop in profits for the current financial year (2025). According to media reports, last year Toyota recorded a profit of 4.8 trillion yen (about $33 billion). But this year the company expects profits to drop to 3.8 trillion yen (about $26 billion).
Toyota said that in the first half of the year it faced some certification-related problems and supply chain disruptions, but in the second half production again increased to 10 million vehicles annually.
Investments continue in the future, but the threat of tariffs remains
The company's Executive Vice President and CFO Yoichi Miyazaki said during the earnings call, "We made big investments for the future and strengthened the company's foundation. Along with this, we maintained good profits by increasing earnings from pricing and value chain."
Toyota said that there are many reasons for the decline in its profits. The first major reason is America's new tariff policy, the second is the rising prices of raw materials and the third is the strength of the Japanese Yen. Apart from this, the company is also keeping in mind the investments being made for the future in America and the rising wage costs, which almost every automobile company is facing.
Attempts not to burden customers
Toyota is currently in no mood to burden its customers with expensive taxes. CFO Miyazaki said, "We believe that the customers decide the prices. We have definitely increased the prices of those products which are in high demand. But we will take the right steps at the right time for any necessary changes."
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