What tariffs? Toyota hits record sales in 2025, despite Trump’s auto levies

Toyota Motor Company has solidified its status as the leading automaker in the world for 2025, achieving record sales of 10.5 million vehicles, as announced on Thursday. This impressive figure marks a 3.7% increase compared to the previous year, surpassing the Volkswagen Group's 9 million units and Hyundai Motor Group's 7.27 million units. The surge in demand was significantly driven by strong sales of hybrid models, including the popular Prius and RAV4, particularly in the United States. Remarkably, Toyota's growth in the U.S. occurred despite a challenging tariff landscape established by former President Donald Trump, who initially imposed a 25% tariff on Japanese automobiles before reducing it to 15%. Toyota and Lexus experienced a 7.3% increase in sales in the U.S., reaching 2.93 million units. This resilience can be attributed to the company's strategy of absorbing tariff-related costs instead of transferring them to consumers through widespread price increases, alongside a commitment to local production and cost management. Despite projecting that U.S. tariffs would lead to a financial impact of approximately 1.45 trillion yen ($9.7 billion) in the fiscal year ending March 2026, Toyota raised its full-year operating profit forecast, highlighting successful cost-saving measures and robust demand in markets outside the U.S. In a related development, Hyundai Motor also reported a growth of over 6% in global revenue for 2025, largely driven by hybrid sales in the U.S. However, the South Korean automaker faced a 19.5% drop in operating profits, attributed to tariffs costing the company around 4.1 trillion won. Following a trade agreement last year that reduced tariffs on South Korean vehicles to 15%, Trump recently threatened to reinstate the higher rate, citing delays in legislative action. Hyundai’s reliance on imports for U.S. sales is notably higher, with only about 40% of its sales being produced domestically in 2025. The company aims to enhance local manufacturing at its Georgia plants to exceed 80% by 2030. In contrast, Toyota has kept its import levels to approximately one-fifth of its U.S. sales and is actively expanding its manufacturing footprint in the country, particularly for hybrid vehicles. As Toyota prepares to announce its fiscal third-quarter earnings on February 6, analysts predict a nearly 30% rebound in operating profits compared to the same quarter last year, according to estimates from Reuters. Following the sales announcement, Toyota's shares saw a 3% increase in trading on Thursday.