Published by Global Banking & Finance Review®
Posted on February 5, 2025
2 min readLast updated: January 26, 2026
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Toyota increases its profit forecast by 9% due to business strengthening, despite a 28% decline in Q3 earnings. Strong hybrid demand and future EV plans are key factors.
TOKYO (Reuters) -Japan's Toyota Motor raised its full-year operating profit forecast by 9% on Wednesday, in a sign of confidence in its ability to ride out the impact of any potential U.S. tariffs.
The world's top-selling automaker raised its profit forecast for the current year through March 2025 to 4.7 trillion yen ($30.7 billion) versus 4.3 trillion yen expected previously.
The revision reflected efforts to strengthen its earnings power through keeping a lid on incentives, raising prices and stabilising production, Toyota said in presentation materials. It also expects to gain from a weak yen.
Toyota made the revision even though it posted weaker-than-expected earnings for the third quarter for which it booked its second successive quarterly profit decline.
Operating profit for the three months through December totalled 1.22 trillion yen, down 28% from a year earlier and compared with the 1.42 trillion yen average of nine analyst estimates in an LSEG poll.
In recent quarters, Toyota's profit was pushed higher by strong hybrid vehicle demand in the U.S. and other major markets.
By region, operating income in North America, which includes its top market by vehicle sales, the United States, fell by 63% over the first nine months of the financial year mainly due to a decrease in sales volume and higher personnel-related costs.
Operating income in China also declined during that period, pressured by higher marketing costs as the automaker sought to retain market share amid heavy competition from Chinese brands.
Toyota said it would establish a wholly owned company in Shanghai to develop and produce electric vehicles and batteries for its luxury Lexus brand, with production set to start in 2027 and have an initial capacity of around 100,000 units a year.
Last week, Toyota reported global group unit sales of 10.8 million vehicles for 2024, making it the world's best-selling automaker for a fifth successive year.
Its share price, which was up 1.5% just before the earnings release, sold off immediately after the result was published before reversing that loss. It was up 4.7% at 3,008 yen as at 0521 GMT.
(Reporting by Daniel Leussink; Editing by Christopher Cushing)
The article discusses Toyota's decision to raise its profit forecast by 9% due to overall business strengthening.
Toyota revised its forecast due to strengthened earnings power, a weak yen, and strong hybrid vehicle demand.
Toyota plans to establish a company in Shanghai to develop and produce electric vehicles for its Lexus brand starting in 2027.
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