Toyota Motor Corp. said its latest fiscal-year earnings fell while its global sales rose, attributing the profit drop to President Donald Trump’s tariff policies, currency effects, and broader shocks linked to the war in the Middle East.
In results released for the fiscal year ended in March, Toyota reported profit of 3.85 trillion yen ($25 billion), down 19% from nearly 4.8 trillion yen in the previous fiscal year, according to the company.
Toyota said the tariff policies erased about 1.4 trillion yen ($9 billion) from its annual operating income. The company also pointed to unfavorable exchange-rate trends that hit its profit margins.
Despite the earnings decline, Toyota said it sold nearly 9.6 million vehicles around the world, up from about 9.4 million the year before. It said vehicle sales rose 5.5% to 50.7 trillion yen ($323 billion) from 48 trillion yen in the prior fiscal year.
On a quarterly basis, Toyota reported profit jumped 23% to 817 billion yen ($5.2 billion) from 664 billion yen, while January-March sales rose nearly 2% to 12.6 trillion yen ($80 billion).
For the current fiscal year through March 2027, Toyota forecast it would sell 9.6 million vehicles and set a relatively modest outlook for profit at 3 trillion yen ($19 billion), citing potential impact from developments in the Middle East.
Toyota said it expects supply-chain disruptions due to the closure of the Strait of Hormuz, which it said is effectively blocked because of the Iran war. The company also said its vehicle sales in the Middle East have dropped.
The automaker said Japan imports almost all its oil, much of it from the Middle East, and that the war has boosted the price of oil and other materials. It said routing shipments through longer routes to avoid the strait is adding to costs for many companies.
Toyota also reiterated a plan to transform into “a mobility company,” saying it hopes to expand beyond vehicles with boats and planes. It also said it will keep innovating and expand outside the auto industry, including robotic arms that restack store shelves and devices to transport medical equipment.
Toyota said it plans to grow leaner by reorganizing its models and increasing local procurement while cutting costs. Toyota shares fell 2.2% after the earnings were announced.