Toyota Records Higher-Than-Expected Operating Profits Despite U.S. Tariff Challenges

Toyota Motor Corporation announced its financial results for the quarter ending in July on Thursday, August 7, where operating profits exceeded analysts' expectations, despite the pressures from U.S. tariffs that affected its performance.

According to "LSEG", revenues reached 12.25 trillion yen, surpassing expectations of 12.19 trillion yen, while operating profits recorded 1.17 trillion yen, compared to analysts' expectations of 881.41 billion yen.

However, the results showed an 11% decline in operating profits year-on-year, which the company attributed to estimated losses of 450 billion yen due to U.S. tariffs. Net income also fell by 37% to 841.3 billion yen, prompting Toyota to lower its annual operating profit forecast by 600 billion yen, settling at 3.2 trillion yen.

The company commented in its statement: "Due to the impact of U.S. tariffs and other factors, the actual results showed a decline in operating profits, and the forecasts have been adjusted downward."

Nevertheless, Toyota confirmed the continued strong global demand for its products, as it recorded record sales in the first half of the year. It added: "Despite the challenging external environment, we continued to implement comprehensive investments alongside improvements such as increasing sales volume, reducing costs, and expanding value chain profits, which helped mitigate negative impacts."

This comes at a time when Japanese companies are facing significant challenges in the U.S. market after a 25% tariff was imposed on imported cars in April, as part of U.S. President Donald Trump's policies. Data from the Japanese Ministry of Trade showed a 25.3% year-on-year decline in the value of exports to the U.S. in July, despite a 4.6% increase in exported quantities.

Last month, Trump announced a new trade agreement with Japan that includes reducing tariffs to 15%, but the timeline for implementation remains unclear. The U.S. market is pivotal for the Japanese economy, as exports of cars to the U.S. accounted for about 24% of Japan's total global shipments in 2024, according to customs data.