Toyota seen posting fifth straight profit drop as investors assess quake fallout

• Global Toyota and Lexus sales fell 3% to 2.5 million units in Q1, with sharp declines of 28% in China and 33% in the Middle East offsetting modest U.S. growth
• The recent Kyushu earthquake forced production suspensions at three regional plants through Wednesday and another central Japan plant through Friday, with supplier Aisin unable to confirm when a damaged facility will resume operations
• Analysts cite weaker-than-expected sales volumes across multiple markets, including 16% decline in Oceania and 5% drop in Latin America where Chinese brands like BYD are expanding aggressively

Toyota Profit Decline and Earthquake Impact Summary

Key Financial Forecast:

Toyota is expected to report operating profit of 1.11 trillion yen ($7.04 billion) for Q1 (April-June), marking a 5% year-over-year decline and the company's fifth consecutive quarterly profit drop. Full-year operating profit forecast stands at 3 trillion yen, though analysts await potential revisions.

Sales Performance:

Global sales of Toyota and Lexus vehicles fell 3% to just over 2.5 million units in Q1. Regional declines included:

• China: down 28%
• Middle East: down 33%
• Oceania: down 16%
• Central/South America: down 5%
• Modest growth in the United States

Earthquake Disruption:

A deadly earthquake struck Japan's Kyushu island last week, forcing production halts at four domestic plants. Three regional plants remain suspended through Wednesday, with another central Japan facility halted through Friday. Two affected plants are vehicle assembly sites. Supplier Aisin reported damage to a plant near the epicenter with no timeline for production resumption.

Challenges Cited:

• Rising supply chain costs linked to Middle East conflict (beginning late February), driving up aluminum and naphtha prices
• Disrupted vehicle shipments to Middle East
• Increased competition from BYD and Chinese brands in Oceania and Latin America
• U.S. sales pressure from RAV4 SUV model transition to redesigned version

Market Implications:

Investors are watching for guidance on earthquake fallout impact and potential adjustments to full-year forecasts amid elevated material costs and production disruptions. Results announcement scheduled for Tuesday, August 5, 2026.