Dive Brief:
- Toyota Motor Corp. posted a year-over-year net revenue increase of 9.6% ($255.6 billion) on higher sales volume for the nine-month period of FY2026 ending Dec. 31, the automaker reported in its earnings release Friday.
- However, Toyota’s YoY operating income decreased from $24 billion to $21.5 billion in the nine-month period, while its net income fell nearly 25%, from $26.8 billion to $20.3 billion.
- The automaker said the declines were largely due to U.S. tariffs on vehicle imports from Japan, which had a negative impact of roughly $8 billion on its operating income. Toyota also reported that its profits were further eroded by higher labor and operational costs across its key global markets.
Dive Insight:
The nearly 10% jump in net revenue helped to offset Toyota’s profit declines. The automaker reported record-high global consolidated vehicle sales of 7.3 million units in the nine-month period ending Dec. 31, 2025, an increase of roughly 302,000 vehicles. The automaker reported sales growth in all of its key global regions with the exception of Asia, where sales fell by 53,000 units.
In North America, Toyota’s biggest global market, the company reported a rare operating loss of $40 million in the first nine months of FY2026, despite brisk vehicle sales in the region. It was due to a YoY decline of roughly $1.4 billion in operating income compared to a profit of $1.3 billion a year earlier. Toyota also cited tariff pressures for the loss, as well as an increase in expenses and other factors.
Still, Toyota’s U.S. vehicle sales were the highest since 2017. Sales reached 2,518,071 vehicles in the U.S. last year, an 8% increase (275,000 units) on a volume basis, with brisk sales of some of its most popular models.
Toyota reported the best-ever U.S. sales in 2025 for the Camry and Corolla Hybrid, RAV4, Tacoma and Grand Highlander. Sales of the Camry sedan, which is only offered with a hybrid powertrain, were up 2% YoY to 316,185 units. Combined Camry and Corolla sales totaled 248,088 vehicles, a YoY increase of 6.5%.
Sales were especially strong in the truck and SUV segment in 2025. Toyota Grand Highlander sales jumped by 90.7% to 136,801 units, while midsize Tacoma pickup sales jumped by 42.4% YoY to 274,638 units.
The RAV4 was another big seller for Toyota in the U.S., reaching 479,288 vehicles in 2025, a 1% increase from the prior year. Sales of the Sienna minivan were also brisk, reaching 101,486 units through December, representing a 35.2% increase on a volume basis.
Looking ahead, Toyota’s full-year forecast calls for global consolidated vehicle sales of 9.75 million units for FY2026 ending March 31. Net revenue is expected to increase roughly 4% to $333.3 billion. But the profit declines are expected to weigh heavily on the company’s bottom line.
Toyota forecasts a 20.8% decline YoY in operating income, while its net income is expected to fall by around 25% YoY to $23.8 billion, which it said is largely due to tariff pressures.
