Toyota Motor has raised its full-year operating profit forecast by 9%, signaling confidence in its ability to withstand potential U.S. tariffs and economic challenges. The world’s top-selling automaker now expects an operating profit of 4.7 trillion yen ($30.7 billion) for the fiscal year ending March 2025, up from its previous projection of 4.3 trillion yen.
The upward revision reflects Toyota’s efforts to boost earnings by controlling incentives, raising prices, and stabilizing production. The company also stands to benefit from a weaker yen.
Mixed Financial Performance
Despite the optimistic full-year outlook, Toyota reported weaker-than-expected third-quarter earnings, with operating profit falling 28% year-on-year to 1.22 trillion yen. This figure missed analyst estimates, which had projected an average of 1.42 trillion yen.
Strong demand for hybrid vehicles, especially in the U.S., has been a key driver of Toyota’s profits in recent quarters. However, regional challenges affected overall performance:
- North America: Operating income fell 63% in the first nine months of the financial year due to lower sales volume and rising labor costs.
- China: Higher marketing expenses amid intense competition from Chinese brands also weighed on earnings.
Expanding EV Presence in China
Toyota is ramping up its electric vehicle (EV) strategy in China by establishing a wholly owned company in Shanghai to develop and produce EVs and batteries for its Lexus luxury brand. Production is expected to begin in 2027, with an initial annual capacity of 100,000 units.
Maintaining Global Leadership
Toyota remains the world’s best-selling automaker for the fifth consecutive year, reporting global sales of 10.8 million vehicles in 2024.
Following its earnings announcement, Toyota’s stock experienced fluctuations but ultimately surged 4.7% to 3,008 yen as of 0521 GMT.
