Aug 12 2025

Toyota and Honda are expected to report notably weaker first-quarter earnings this week, as heavy U.S. import tariffs and a stronger yen weigh on profits. Analysts estimate a 31% year-on-year drop in Toyota’s operating profit to ¥902 billion (~US$6.1 billion), while Honda may see a 36% decline to ¥311.7 billion. Both automakers continue to benefit from solid demand for hybrids in overseas markets, particularly the U.S.

Looking ahead, both companies may find relief from the recently signed trade agreement that cuts U.S. tariffs on Japanese auto imports from 27.5% to 15%, potentially taking effect in August or September. Hybrid vehicle resilience and the eventual easing of tariffs are expected to gradually support profitability going forward