The world’s largest automaker, Toyota, predicts an unprecedented loss of 1.3 billion dollars in April and May 2025 as Trump’s tariffs continue to bite. This makes them the auto industry’s biggest loser in projected losses over the period.
The company revealed this during a press briefing on Thursday, May 8, on its fiscal year, which ended March 31, 2025.
While Toyota has increased local production in the US to more than half of sales in the country, it still relies on imports of key vehicle parts and models, to the tune of some 1.2 million cars a year.
The company states that the lower profit is due to a stronger yen, higher material prices, and tariffs. Like other automakers, Toyota could face high labor costs and increased investment costs if it expands its US production base.
Other Japanese automakers have adjusted their global manufacturing footprints due to the new trade environment. Nissan has stopped US orders for SUVs made in Mexico, Honda is shifting hybrid Civic production from Japan to the US, and Mazda is stopping exports of a model manufactured at a joint venture with Toyota in Alabama.
General Motors and Ford are facing significant profit cuts due to import duties on cars and auto parts. Ford is expecting a $1.5 billion annual hit, while Toyota expects a $1.2 billion profit drop in just two months. Toyota projects an operating income of ¥3.8 trillion ($26.1 billion) for the fiscal year ending March 2026, far below analysts’ expectations, Bloomberg reports.
Analysts have cautioned that tariffs may result in higher costs for consumers both domestically and internationally, which would lower consumer confidence.
However, Toyota has not mentioned raising customer prices to cover tariff-related costs. It said it would look at the situation and take the appropriate action. “Just because of tariff rising prices hastily is not the type of reaction Toyota is thinking of,” CEO Koji Sato said during a media briefing.
