Toyota Motor Corporation reported a 21% decline in full-year net profit for fiscal 2024, attributing the slump to rising global tariffs, supply chain disruptions, and softening demand in key markets. The automaker’s earnings highlight growing pressures on the automotive sector as trade tensions reshape manufacturing strategies.
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Key Financial Highlights
✔ Net Profit: ¥2.8 trillion (19.2billion),downfrom¥3.55trillion(19.2billion),downfrom¥3.55trillion(24.3 billion) in FY2023
✔ Revenue: ¥38.6 trillion ($265 billion), a 4% decrease year-on-year
✔ Global Sales: 9.2 million vehicles (vs. 9.5 million in FY2023)
Regional Performance
- North America: 5% decline due to higher tariffs on imported components
- Europe: 8% drop amid stricter emissions regulations
- China: Sales down 12% as local EV makers dominate
Why Profits Are Falling
1. Tariff Troubles
- US-China trade war led to 25% duties on certain auto parts
- EU carbon border tax increased costs for non-EU suppliers
- Mexico’s new import rules disrupted North American supply chains
2. Slowing Hybrid Demand
- EV price wars hurt Toyota’s hybrid-heavy lineup
- Delayed BEV launches left it behind in China and Europe
3. Stronger Yen Impact
- Currency appreciation reduced overseas earnings by ¥420 billion ($2.9 billion)
Toyota’s Response Strategy
✔ Accelerating EV plans – 10 new battery-electric models by 2026
✔ Localizing production – New plants in US and Thailand to avoid tariffs
✔ Cost-cutting – ¥1.2 trillion ($8.2 billion) efficiency push
“We’re navigating unprecedented trade headwinds,” said Toyota CFO Yoichi Miyazaki. “Our focus is on flexible manufacturing and faster electrification.”
Market Reaction
- Toyota shares fell 3.5% in Tokyo trading
- Analysts split on recovery timeline – some see 2026 rebound, others warn of prolonged slump
- Rivals also struggling – Honda, Nissan report similar tariff-related dips