Toyota has warned that operating profits will fall 21 per cent in the fiscal year ending March 2026, largely due to the fallout from Donald Trump's trade war.
The Japanese automaker expects an operating profit of ¥3.8trillion ($19.8billion) compared with ¥4.8trillion (£25billion) in the year just ended.
The forecast comes as the company faces significant headwinds from a stronger yen and the impact of President Trump's tariffs on imports of foreign-made cars and parts.
The gloomy outlook increases pressure on Japan to reach a deal on tariffs with the United States.
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President Donald Trump's tariffs continue to have a devastating impact on the auto industry
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Toyota forecasts that US tariffs will have an impact of ¥180 billion (£939million) for April and May alone.
Beyond that period, the effect of the auto tariffs is "very difficult to forecast," according to Toyota's chief executive, Koji Sato.
"The current environment surrounding the auto industry, including trade relations, is in extreme flux," Sato said during a briefing on Thursday.
The 25 per cent tariff on vehicle imports into the United States was implemented in early April and extended to auto parts last week.
Ford has hiked the price of some Mexican-made vehicles in the United States
PAIn its fourth quarter, Toyota's operating profit remained almost flat year-on-year at ¥1.2trillion (£6.2billion) while revenue increased 12 per cent to ¥12.3trillion (£64.1billion).
Akio Toyoda, grandson of Toyota's founder and Chairman of Toyota Motor Corporation, is considering investing his personal money to lead the buyout of the industrial equipment and vehicle maker.
Toyota Motors is also considering investing in what would be one of the world's largest buyouts, Reuters reported.
The Japanese brand is not alone in facing uncertainty from the tariffs, with the global car industry thrown into turmoil.
Mercedes-Benz, Volvo Cars and Ford have all pulled their guidance for this year due to the evolving nature of Trump's tariffs.
General Motors has warned of an up to $5billion (£3.7billion) hit from the levies, even though President Trump has offered relief to carmakers to soften the impact of his 25 per cent tariffs.
Ford will hike the price of three cars manufactured in Mexico - the Mustang Mach-E electric SUV, Maverick pickup and Bronco Sport - by as much as $2,000 (£1,500) in response to the tariffs.
It added that it had not passed on the full cost of the tariffs to customers, saying: "Our approach throughout this evolving situation continues to be what's right for our customers - and our business."
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Volvo said it would be cutting jobs at its South Carolina plant
VOLVOVolvo also announced that it would cut five per cent of jobs at its Charleston, South Carolina factory as it continues to assess the impact of the tariffs.
Despite this, a spokesperson for Volvo said it remained committed to creating 4,000 jobs in South Carolina by boosting output in the future.
