Toyota Motor Corporation has reported a 3.5% increase in global revenues in the first quarter of the current fiscal year (FY26), between April and June 2025. The company saw a rise in vehicle sales by over 7% to 2.411 million units, driven mainly by strong growth in Japan and North America.
However, despite the increase in sales, Toyota experienced a decline in operating profit by almost 11% to JPY 1,166.1 billion. This decrease was attributed to adverse exchange rate fluctuations, higher material prices, and cost-reduction expenses. As a result, the operating margin fell to 9.5% from 11.1% a year earlier, and net income also dropped by 37% to JPY 843.1 billion. The news of the decline in profit caused Toyota’s share price to dip by 2.4% in Tokyo.
While Toyota maintained its global revenue forecast for the full fiscal year at JPY 48,500 billion, it revised down its operating profit forecast to JPY 3,200 billion from JPY 3,800 billion. This revision was due to the impact of adverse exchange rate fluctuations and higher material prices. The company also anticipated a negative impact of JPY 1,400 billion from recent US import duties.
As a result of these factors, Toyota’s operating margin is expected to decrease to 6.6% for the full fiscal year, compared to the previous forecast of 7.8% and the 10% margin achieved in the previous fiscal year. To mitigate these challenges, Toyota plans to invest JPY 470 billion in the current fiscal year while focusing on cost reduction and increasing value chain profits.
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