Tokyo (AFP) – Japanese auto giant Toyota on Wednesday hiked its operating income and net profit forecasts for the current fiscal year despite the impact of US tariffs. The firm’s share price fell by as much as five percent in Tokyo, however, as the new guidance fell short of market estimates.
“Despite the impact of US tariffs, we have continued to build upon our improvement efforts such as increasing sales volume, improving costs, and expanding value chain profits,” Toyota said. “We are steadily translating comprehensive future investments into improved productivity and increased returns, with a strong focus on improving the breakeven volume,” Toyota said in a statement.
For the year ending in March 2026, Toyota now expects operating income of 3.4 trillion yen ($22.1 billion), up from its previous forecast of 3.2 trillion yen. This is below the market consensus forecast of 3.86 trillion yen, according to Bloomberg News. Net profit was seen hitting 2.9 trillion yen, against its previous estimate of 2.7 trillion yen, Toyota said. It added that it now expected sales this year of 49.0 trillion yen, up from its August forecast of 48.5 trillion yen.
Trade officials in July reached a deal that saw the United States lower tariffs on Japanese goods to 15 percent from a threatened 25 percent. Japanese cars were taxed at a higher rate of 27.5 percent, and the reduction to 15 percent did not take effect until mid-September. Japan’s US-bound car exports slumped 24 percent year-on-year in value in September, a major blow for an automotive sector that accounts for around eight percent of jobs in the Asian nation.
Toyota’s chief financial officer Kenta Kon told reporters that the estimated impact from US tariffs this year would be around 1.45 trillion yen. “We are not taking hasty measures to immediately catch up with this, such as raising vehicle prices in a way that goes against market conditions,” Kon said. “Instead, we are carefully adjusting prices for each vehicle and each region, taking into account the market and competitive conditions,” he said.
The world’s biggest carmaker by unit sales had cut its guidance in August, blaming the impact of US tariffs and other factors. It had lowered its operating income projection to 3.2 trillion yen from 3.8 trillion, and for net income to 2.7 trillion yen from 3.1 trillion. The firm said Wednesday that net income in the first half fell 7.0 percent to 1.8 trillion yen while operating income plunged 18.6 percent to 2.0 trillion. Sales were off 5.8 percent at 24.6 trillion yen. In late trade, Toyota shares were down 4.05 percent at 3,027 yen, having fallen as much as five percent.
© 2024 AFP
