Market attention is turning towards the Japanese company Toyota, which is preparing to announce its new financial results on Wednesday, amidst expectations of a decline in its operating profits for the second consecutive quarter, due to pressures from U.S. tariffs and supply chain challenges that are creating a difficult reality for the world's largest car manufacturer.
Analysts estimate that Toyota will record a profit drop of up to 25% year-on-year, reaching approximately 863 billion yen, equivalent to 5.7 billion U.S. dollars, in the quarter extending from July to September. This performance is expected to be the weakest since 2022, despite rising global sales and significant surges in the hybrid vehicle sector.
Analysts believe that the weakness of the Japanese yen may give Toyota limited space to adjust its future guidance; however, the impact of the 15% tariffs imposed on imports from Japan to the United States remains a key pressure factor on profit margins.
Market data shows that Toyota and its luxury brand "Lexus" sold 7.8 million units during the first nine months of the year, an increase of 5% compared to the previous year, driven by strong demand for hybrid vehicles in the United States, where their sales jumped by 8%. Additionally, the company's sales in China and India rose by 5% and 12% respectively, reflecting its continuing global expansion despite challenges.
In a previous announcement, Toyota estimated its losses resulting from U.S. tariffs at around 1.4 trillion yen, prompting it to lower its profit forecast for the fiscal year by 16% to 3.2 trillion yen. Hybrid vehicles account for about 42% of Toyota and "Lexus" sales, while fully electric vehicles still make up less than 2%, highlighting the company's commitment to hybrid technology as a balanced choice between efficiency and emissions.
Toyota's upcoming results are viewed as an indicator of Japanese companies' ability to adapt to global economic shifts, as Toyota stands at a crossroads between trade pressures from Washington and a slowdown in Chinese markets, alongside its bets on hybrid vehicles that continue to provide it with a strategic advantage in the global automotive sector.
