Toyota Motor is maintaining a bullish stance amid the trading headwinds with U.S. tariffs in the first half of 2025. Despite reporting operating income of 2 trillion yen ($13 billion) in Q2, it’s down about 500 billion yen compared to the same period last year.
Still, Toyota expects full-year operating profit of 3.4 trillion yen for the fiscal year ending in March 31, 2026, a 6% hike from the 3.2 trillion yen it previously forecast.
Strong demand for its cars in the first half of FY2026, particularly in Japan and the U.S. where both saw higher sales volumes, proves the automotive group’s product competitiveness, Toyota’s CFO Kenta Kon told an online investor call.
He said the full-year operating income forecast remains, despite the impact of U.S. tariffs now standing at 15% for auto imports from Japan.
“We have continued to build upon our improvement efforts such as increasing sales volume, improving costs and expanding value chain profits,” Kon said.
He also pointed to the Five Brand Strategy announced at the Japan Mobility Show 2025 including Toyota, Lexus, Daihatsu and GR, along with its new ultra-luxury Century brand.
“By having each brand take on clearer roles within the Toyota Group to form complementary relationships, we can expand customers' choices even further with a diverse range of products that meet the needs of each individual,” Kon added.
With this in mind, he said that Toyota’s consolidated vehicle sales forecast remains unchanged for the fiscal year ending March 2026. He also said the company expects even more robust demand for its products, particularly in North America.
For the first half of FY2026 ending Sept. 30, consolidated vehicle sales reached 4,783,000 units, an increase of 5% from the same period last year. Toyota and Lexus brand retail sales totaled 5,267,000 units in H1, a 4.7% increase compared to the same period last year. Toyota-Lexus vehicle sales has been revised upward by 100,000 units to 10.5 million units.
Sales of electrified vehicles accounted for 46.9% of Toyota’s retail sales volume in H1, driven mainly by strong hybrid-electric (HEV) demand in North America and China.
Consolidated financial results for the first half of FY2026 saw sales revenues of 24.6 trillion yen ($160.4 billion), operating income of 2.6 trillion yen, income before income taxes of 2.5 trillion yen and net income of 1.8 trillion yen.
Meanwhile, year over year pressures on operating income, including tariffs and costs incurred for materials and strengthening its supply chains, dragged down Toyota’s year over year operating profits in the first half of FY2026 from 2.46 trillion yen to 2 trillion yen.
“In the midst of the impact of U.S. tariffs amounting to 1.45 trillion yen, our improvement efforts, such as increasing volume, model mix, improving costs, and expanding value chain profits are expected to result in an aggregate positive impact of 0.9 trillion yen,” Kon said.
Toyota’s full-year consolidated financial forecast for FY2026 calls for sales revenue of 49 trillion yen ($319.5 billion), operating income of 3.4 trillion yen, income before income taxes of 4.2 trillion yen and a net income of 2.9 trillion yen.
Kon also said on its earnings call that Toyota is making strides in software-defined vehicles, starting with its global best-seller, the RAV4, which is the first model to adopt the automaker’s new software platform Arene.
“By utilizing the vast amount of data collected from roads and vehicles across the world, we will develop and refine SDVs together with our customers,” Kon said.
