The world’s top selling automakers are on the growing list of companies reporting profit hits due to tariffs
Toyota is expected to hit a $9.5 billion hit from US President Donald Trump’s tariffs on cars imported into the US, the largest company ever, highlighting increased margin pressure.
The world’s top selling automaker announced the impact of the forecast along with updated annual guidance on Thursday.
Toyota also cut its full-year operating profit forecast by 16%, reflecting the challenges of global manufacturers working to increase costs from US taxes on automobiles, parts, steel and aluminum.
“It’s honestly very difficult to predict what will happen in terms of the market environment,” said Takano’s financial director, Takano, briefing that he vows to build cars for U.S. customers, regardless of the impact of fees.
Azure said the 1.4 trillion yen ($9.5 billion) estimate includes fallouts facing suppliers, particularly importing from US suppliers from Japan, but he refused to see how much of the total was attributable to it.
This is because Toyota’s North American business suffered an operating loss of 63.6 billion yen ($431.3 million) in the first quarter, resulting in a hit of 400 billion yen ($3 billion) from tariffs due to a profit of 100 billion yen ($682.9 million) the previous year.
A wide range of production operations, including plants in the US, Canada, Mexico and Japan, are subject to tariffs not only to direct exports, but also to vehicles and parts shipped across borders within North America.
Last week, the automaker said that for the first six months of 2025, 1.1 million Toyota and Lexus branded vehicles were revealed in North America, including more than 700,000 in the US.
Prediction falls
Toyota reduced its operating profit forecast for the end of March 2026 to 3.2 trillion yen ($21.7 billion) from its previous forecast of 3.8 trillion yen ($25.7 billion).
Previously, they estimated a tariff hit ($1.2 billion) of ¥180 billion ($1.2 billion) in April and May, but this was due only to the impact of tariffs on Toyota vehicles. Until now, we have not issued a full year forecast.
Rivals have reported small tariff hits so far. Jeep maker Stellantis said tariffs are expected to add an additional $1.7 billion in annual costs. General Motors (GM) forecasts one of $4 billion to $5 billion a year, while Ford expects its $3 billion total revenue to reach pre-tax adjusted profits.
On Wednesday, Ford reported that its second quarter results received a $800 million hit from tariffs.
Trade Transactions
The first quarter results highlight the pressure that US import duties are underpinning Japanese automakers, despite the trade agreement between Tokyo and Washington providing potential relief.
Under the transaction agreed last month, Japanese automobile exports to the US will face 15% tariffs from the previous total tax of 27.5%. However, the time frame for the change has not been revealed yet.
Last week, Toyota reported record global production and sales in the first half due to strong demand in North America, Japan and China, including gasoline-electric hybrid vehicles.
The automaker also announced plans to build a new vehicle factory in Japan on Thursday. The plan has seen a decline in car sales due to population declines and ownership declines.
Toyota said it plans to start operations at the new plant 10 years from now, but has yet to decide on a production model.
On Wall Street, Toyota’s inventory is declining amid downward revision forecasts. As of 11:30am (15:30 GMT) in New York City, it was down 1.6%. Competitor stocks are mixed. Ford has dropped by 0.5%, Stellantis has increased by 2.4%, and GM has increased by about 0.7%.
