Toyota is expecting fallout from the Middle East conflict to cost it around $4.3 billion in FY27. The world's largest automaker said on Friday, in one of the biggest warnings yet on the impact of the crisis on global companies. The Japanese auto giant has reported an almost 50% drop in its quarterly earnings, Reuters has reported. The company further stated that it expects full-year profit to decline by a fifth in this financial year, as rising costs and supply snarls from the war outweighed surging demand for hybrid vehicles.
Middle East impact on Toyota's sales, earnings & profit
Toyota has said that it estimated the impact of the Middle East crisis will be around $4.3 billion on the company's sales, earnings and profit in this financial year. This exceeded the estimates of the crisis's impact on any major companies that have been estimated so far. The impact is attributed to the higher costs for raw materials and fuel, as well as the lower sales volumes and logistics delays.
Check similar Cars
The global auto industry, along with other key sectors, has already been grappling with the US tariffs. Besides that, Toyota is under pressure due to the rapid rise of the Chinese automakers. The latest surge in energy prices heaps further pain to these challenges for the OEM.
Last week, Toyota stated that its sales in the Middle East, which is a key region for the brand, dropped sharply in March 2026, after shipments to the region were disrupted.
This outlook of FY27 sales, earnings, and profit is the first issued by Toyota under the company's CEO Kenta Kon, who faces the challenge of steering the automaker through the impact of US President Donald Trump's tariffs, which cut the company's operating profit in FY26 by 1.4 trillion yen.
Toyota hybrid sales to exceed 5 million mark in FY27
{{/usCountry}}This outlook of FY27 sales, earnings, and profit is the first issued by Toyota under the company's CEO Kenta Kon, who faces the challenge of steering the automaker through the impact of US President Donald Trump's tariffs, which cut the company's operating profit in FY26 by 1.4 trillion yen.
Toyota hybrid sales to exceed 5 million mark in FY27
{{/usCountry}}Toyota has also said that it expects its hybrid vehicle sales to exceed five million (50 lakh) units for the first time ever this fiscal. The automaker is expecting that the high energy prices owing to the ongoing conflict in the Middle East region will drive more customers to buy fuel-efficient cars like the hybrids. However, Toyota has also stated that it is not going to be enough to offset the underlying cost pressures. Toyota reported an operating profit of $3.6 billion for the January-March period, down from what it recorded a year earlier.
Toyota CEO Kon said that it's not about stepping on the brakes completely, but about identifying waste one by one and changing structures piece by piece, carrying out reform. He praised Toyota's ability to deliver nearly 3.8 trillion yen in operating profit in the financial year that just finished, despite significant changes in the operating environment.