Toyota says tariffs will cause US$9.5b hit, slashes annual forecast
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The news: Toyota cut its annual profit forecast ahead of what it expects will be a USD9.5 billion ($14.6 billion) hit from US trade tariffs, having reached a trade deal with the US in July for a 15% tariff on Japanese goods imported to the US.
The numbers: The Japanese carmaker’s first-quarter net profit tumbled 37% to ¥841.345 billion from the year prior, while revenue rose 3.5% to ¥12.253 trillion.
Toyota cut its annual profit forecast due to Trump’s tariffs which it expects will negatively impact its profit by ¥1.4 trillion. The carmaker maintains expectations for group vehicle sales to rise 1.7% to 11.20 million units this fiscal year.
For the year ending March, Toyota made 3.2 million vehicles in Japan and exported about 542,000 to the US.
The context: In a briefing on the carmaker’s results, head of finance for Toyota, Takanori Azuma, said: “It's honestly very difficult for us to predict what will happen regarding the market environment.”
Global manufacturers continue to struggle with the rising costs of US tariffs on cars, car parts, steel and aluminium, with General Motors having projected a USD4-$5 billion tariff hit for the year.
Also on Thursday, Toyota announced plans to build a new car manufacturing facility in Japan despite a decline in local car sales. Toyota plans to begin operations at the new factory in the early 2030s.
The sources: Toyota Earnings, Wall Street Journal, Reuters
