Toyota Motor’s new CEO announced a 49% decline in quarterly operating profit, and said full-year profit is expected to fall by a fifth.
The company’s operating income was 569.4 billion yen vs. 813.28 billion yen expected and down from 1.1 trillion yen a year earlier.
Global consolidated vehicle unit sales increased by 232 thousand units, or 2.5%, to 9,595 thousand units in FY2026 compared with FY2025. Vehicle unit sales in Japan increased by 91 thousand units, or 4.6%, to 2,082 thousand units in FY2026 compared with FY2025. Overseas vehicle unit sales increased by 142 thousand units, or 1.9%, to 7,513 thousand units in FY2026 compared with FY2025.
“Despite the impact of U.S. tariffs (-1.4 trillion yen), we secured profits consistent with our guidance due to increased vehicle sales volumes and the effects of price revisions underpinned by strong product competitiveness, as well as steadily accumulated improvement efforts such as expanded value chain revenues,” the company wrote.
In a letter to shareholders, new CEO, Kenta Kon said, “Since I was appointed president in April, I have been visiting worksites across our operations, including development, certification, plants, suppliers, and dealers. There, I saw firsthand how our frontline members are working tirelessly to build ever-better cars even as they face numerous issues.”
“I feel there is still significant room for improvement in our management and administrative operations. Those of us in such positions, by further examining where our abilities truly lie, can move beyond simply “managing” the front lines and instead get directly involved to support operations. Instead of just “managing” numbers on paper, we actually need to reduce costs at our worksites. From management work to work that creates value… I feel we need to return to the starting point of Toyota work—the Toyota Production System.”
Looking ahead, the company projects a decline in operating profit of up to $4.3 billion, citing, “likely unable to absorb newly added impact from the Middle East, Aim to accelerate mid- to long-term transformation toward a business structure resilient to environmental changes.”
In March, the company announced plans to invest $1 billion across two U.S. plants, aiming to reach a total investment of up to $10 billion in the country over the next five years.
Toyota shares fell 2.18% following the announcement.
By CEO NA Editorial Staff
