Not all doom and gloom: Toyota reports a net profit again after more than 15 years
Toyota earned approximately €12.3 billion in net profit from April to September 2026, up 26% year on year. Revenue rose 9.5%, even as vehicle sales volumes fell slightly. The Japanese carmaker also raised its full-year profit forecast, showing that its hybrid-focused strategy can deliver strong profitability even amid Chinese competition and international trade tensions.
Lower sales volumes, but higher profit
According to its financial report, the company's revenue for the first half of the financial year reached 26.96 trillion yen, or approximately €148 billion. Operating profit rose 9.2% to around €12 billion, while net profit attributable to shareholders of the parent company increased by 26.1%.
Toyota sold 4.758 million vehicles over the same period, down 0.5% year on year. Profit growth therefore came not from higher vehicle sales, but from pricing, financial services and favourable exchange-rate effects.
A weaker yen increased the value of earnings from overseas. Lower costs associated with US import tariffs and the company's cost management also helped improve its financial outlook.
Not all indicators were equally positive, however. From July to September, Toyota's quarterly net profit fell approximately 19% year on year, although operating profit increased. This shows that the strong half-year result does not mean uniform growth across all financial indicators.
Hybrids keep Toyota competitive
Continued strong demand for hybrid cars remains an important factor behind Toyota's results.
While several competitors invested aggressively in all-electric models, Toyota retained a diverse range of powertrains. Hybrid versions of the Corolla, RAV4 and other popular models allow the company to serve buyers who want lower fuel consumption but are not ready to switch to an all-electric car.
This is particularly important in the US market, where rising fuel prices have made hybrids more attractive.
The situation in China is more difficult. Local electric car manufacturers are putting pressure on Toyota on both price and technology. This is forcing the company to develop electric cars and software tailored to local needs.
In Europe, Toyota's hybrids compete primarily with electrified models from Renault, Hyundai and Volkswagen. Established technology, large production volumes and a broad model range remain Toyota's strengths.
Toyota raises profit forecast by 15%
Toyota raised its operating profit forecast for the financial year ending in March 2027 from 3.4 trillion yen to 3.9 trillion yen, or approximately €21.4 billion.
Net profit is expected to reach around €19.6 billion. At the same time, the company lowered its annual revenue forecast, indicating that it expects to earn more profit from lower revenue.
Toyota is also planning a substantial programme of returns to shareholders, which could reach approximately €77 billion by March 2031.
Meanwhile, the company continues to invest heavily in electrification, manufacturing technology and robotics.
Toyota's success does not mean electric cars have failed
It would be easy to interpret Toyota's results as proof that the transition to electric cars was premature. The reality is more complex.
The company's profit is supported by demand for hybrids, favourable exchange rates, pricing and financial services. Not all of these factors can be attributed to its powertrain strategy.
The results do show, however, that Toyota's more cautious approach to electrification has allowed it to maintain a profitable product range at a time when some competitors face a painful reassessment of electric car development costs and production volumes.
Toyota's greatest advantage is not just its hybrid technology, but its ability to make a profit from selling cars with different powertrains. This strategy is currently working well in Europe and the US. In China, however, the company must prove that it can compete just as successfully with a new generation of electric cars.
