Toyota is bracing for a 20% drop in profit this fiscal year, as the automaker navigates the fallout from Middle East conflict and new U.S. tariffs.
The world’s top-selling carmaker expects operating income of 3.0 trillion yen ($19 billion) for the year ending March 2027, down from 3.77 trillion yen last year. That forecast falls well short of the 4.59 trillion yen analysts had expected.
The company cited limited short-term options to offset a rapidly changing operating environment. Last month, Toyota suspended shipments to the Middle East after a sharp drop in March sales.
This is the first annual forecast from new CEO Kenta Kon, who took over in April. He faces the dual challenge of conflict in the oil-rich region and the blow from President Trump’s tariffs, which already shaved 1.4 trillion yen off last year’s profit.