(May 8): Toyota Motor Corp put forward a conservative profit forecast after posting record sales, as the growing fallout from the conflict in the Middle East weighs on businesses across the globe. The stock reversed gains and fell as much as 1.6%.
The world’s largest carmaker sees ¥3 trillion (US$19.1 billion) in operating income for the fiscal year ending March 2027, it said on Friday, falling short of consensus estimates for ¥4.6 trillion. The outlook is also lower than the ¥3.8 trillion posted for the prior period through March.
Toyota, known for playing it safe when forecasting results, is bracing itself for a squeeze on the price and supply of crucial materials that could last for months. Toyota suppliers warned last week that they are starting to see shortages in key materials due to the Iran conflict, now in its third month.
Toyota is forecasting ¥51 trillion in net sales for the current fiscal year, less than the ¥53.25 trillion predicted by analysts, and compares with ¥50.7 trillion for the just-ended period.
Toyota’s vehicle sales dipped slightly while production climbed in March, in a sign that its been able to shield itself from the more dire immediate effects of turmoil in the Middle East. Operating profit for the three-month period that ended in March fell 49% to ¥569.5 billion from a year earlier, the company said, due to tariffs and shipping costs due to the war, on sales of ¥12.6 trillion.
“In the US, the RAV4 changeover and a Prius recall left sales slightly below a pre-tariff-boost a year ago,” Bloomberg Intelligence senior auto analyst Tatsuo Yoshida wrote in April. “In China, strong Corolla Cross sales limited the decline amid intense competition.”
See also: Japan issues ‘final’ warning before intervention, lifting yen
Friday’s results mark Kenta Kon’s first since he was appointed chief executive officer. The former CFO and aide to chairman Akio Toyoda will lead an intensifying push to bolster profitability.
Toyota’s biggest suppliers are struggling with rising raw-material costs, shortages of aluminium, resins and other basic supplies and ongoing logistical snags. With barely any visibility on when supplies might run dry, its unclear how heavily this could impact production, or for how long.
Japan’s domestic carmakers import about 70% of their aluminium from the Middle East, according to the Japan Automobile Manufacturer’s Association. The country as a whole imported around 590,000 tons of aluminium, or about 30% of its total supply from the Middle East, in 2025 according to the Japan Aluminium Association.
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