On the Dash:
- Toyota’s hybrid-heavy lineup and U.S. manufacturing footprint helped it endure higher tariffs and deliver record global sales.
- Absorbing tariff costs rather than raising prices proved effective in sustaining U.S. demand and market share.
- Rivals that rely more on imports, like Hyundai, face sharper profit pressure from trade policy volatility.
Toyota retained its position as the world’s top-selling automaker in 2025, reporting record global sales of 10.5 million vehicles, supported by rising hybrid demand and disciplined cost controls.
Combined sales of Toyota and its Lexus luxury brand rose 3.7% from a year earlier, outpacing Volkswagen Group’s 9 million vehicles and Hyundai Motor Group’s 7.27 million units.
U.S. demand for hybrid models such as the Prius and RAV4 played a key role. Toyota and Lexus sales in the U.S. climbed 7.3% to 2.93 million vehicles, even as President Trump imposed tariffs on Japanese automotive imports. Those levies were initially set at 25% before being reduced to 15%.
Toyota absorbed much of the added tariff cost rather than raising prices broadly, while expanding local production and tightening cost controls. The automaker estimated in November that U.S. tariffs would cost 1.45 trillion yen in its fiscal year ending March 2026, but later raised its full-year operating profit forecast, citing efficiency gains and strong demand outside the U.S.
Meanwhile, rival Hyundai also reported global revenue growth of more than 6% in 2025, supported by U.S. hybrid sales, but its operating profit fell 19.5% as U.S. tariffs cost the company 4.1 trillion won.
Notably, South Korea and the U.S. agreed last year to lower tariffs on most South Korean products, including vehicles, to 15% beginning in November. President Trump on Monday threatened to raise the rate back to 25%, prompting Hyundai shares to fall nearly 5%.
Hyundai produced about 40% of the vehicles it sold in the U.S. last year and plans to increase local output at its Georgia facilities to more than 80% by 2030. Toyota, which relied on imports for roughly one-fifth of its U.S. sales, has continued expanding U.S. manufacturing focused on hybrids.
Toyota is scheduled to report fiscal third-quarter earnings on Feb. 6, with analysts expecting operating profit to rise nearly 30% from a year earlier, according to Reuters estimates.
