Toyota forecasts 22% profit drop as new CEO takes helm

Toyota Motor forecast a 22% decline in net profit to 3 trillion yen ($19.1 billion) for the fiscal year ending March 2027, as cost and supply uncertainties stemming from the Middle East conflict weigh on earnings even as robust demand for its hybrid models continues. The world's top-selling automaker expects operating income of 3.0 trillion yen, down from 3.77 trillion yen in the year just ended, missing analyst expectations of 4.59 trillion yen according to a Reuters poll. The outlook marks the first issued under new CEO Kenta Kon, who assumed his role last month and faces the immediate challenge of steering the company through mounting pressures including U.S. tariffs under President Donald Trump that already cut operating profit by 1.4 trillion yen in the previous fiscal year. Toyota said the lower outlook reflected limited scope for short-term measures to offset changes in the operating environment, with mid- to long-term strategic steps still only partly complete. The automaker noted that vehicle sales in the Middle East fell sharply in March after shipments to the region were disrupted, contributing to the cost pressures. Despite these headwinds, the company marked record-high global sales for the fiscal year ended March 2026, powered by strong hybrid vehicle demand, suggesting underlying business strength remains solid even as profitability faces significant near-term challenges from geopolitical disruptions and trade policy shifts.