Toyota remains confident in maintaining consistent profits despite concerns over tariffs as it prepares for its upcoming annual earnings report.

espite this figure representing a 12% decline from the previous year. Related News:Toyota Increases Full-Year Profit Forecast by 9%, Anticipates $30.7 Billion Earnings for Fiscal 2025Toyota Increases Annual Profit Forecast After Surpassing Estimates in Q3Nigeria Banks’ Profits Rise to $1.8bn Despite Harsh Covid-19 Conditions

The anticipated downturn reflects challenges related to the supply of gasoline-electric hybrids like the Prius and Camry, which remain popular despite supplier struggles to meet demand.

The company could face a further profit reduction of up to 800 billion yen in fiscal 2025 due to tariffs affecting exports from Japan to the US. 

This estimate does not account for broader economic impacts or the effect on exports from Toyota’s Canadian and Mexican manufacturing bases. 

In response, Toyota has maintained normal operations while focusing on reducing fixed costs rather than increasing car prices.

Industry insiders suggest that Toyota may consider producing the next generation of its RAV4 SUV in the US to minimize tariff risks and meet rising demand. Toyota’s shares have fallen 13% this year, underperforming the Nikkei 225 index, which has declined by 8% over the same period.

Another key issue for investors is Toyota’s potential involvement in a buyout of Toyota Industries Corporation, a major supplier and former parent company. 

Any investment in the nearly century-old company could be perceived negatively by the market, while efforts to address cross-shareholding concerns may be viewed favorably. 

As of September, Toyota owned approximately 24% of Toyota Industries, which itself held about 9% of Toyota Motor and over 5% of Denso Corporation, another key supplier.

Analysts will also be monitoring Toyota’s stance on cross-shareholdings amid increasing regulatory pressure on Japanese firms to reduce stakes in affiliated companies. Head of mobility research at Macquarie, James Hong, noted that investors would be watching closely to assess the market impact of any potential buyout or strategic shift.

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