Toyota (TM) Stock: World’s Top Automaker Crown Retained for Sixth Year

TLDR

• Toyota Motor posted record 2025 sales of 10.5 million Toyota and Lexus vehicles, a 3.7% increase from 2024, maintaining its sixth consecutive year as the world’s top-selling automaker.
• U.S. market sales surged 7.3% to 2.93 million units, fueled by hybrid vehicles like the RAV4 and Prius, which now represent 42% of global sales.
• The automaker absorbed an estimated $9.7 billion in tariff costs rather than raising prices, with only 20% of U.S. sales coming from imports.
• Toyota raised its full-year operating profit forecast despite tariff pressures, with analysts projecting a 30% operating profit rebound in fiscal Q3 results due February 6.
• Shares climbed 3% following the announcement as the company’s manufacturing strategy and hybrid focus outperformed competitors like Hyundai, which saw operating profits drop 19.5%.

Toyota Motor Corporation delivered a masterclass in navigating tariff uncertainty. The automaker reported record sales of 10.5 million vehicles for its Toyota and Lexus brands in 2025, marking a 3.7% jump from the previous year.

The announcement sent shares up 3% in Thursday trading. Toyota maintained its position as the world’s best-selling automaker for the sixth straight year, beating Volkswagen’s 9 million units and Hyundai’s 7.27 million units.

President Trump’s tariff regime threatened to derail the company’s U.S. business. Initial 25% levies on Japanese vehicles were later reduced to 15%. But Toyota’s strategy turned potential disaster into opportunity.

Toyota Motor Corporation, TM

U.S. sales climbed 7.3% to 2.93 million units. The secret? Hybrids and local manufacturing.

Hybrid Strategy Pays Off

Toyota’s hybrid lineup carried the company through choppy waters. The RAV4 and Prius models drove demand in the U.S. market. Hybrids now account for 42% of the company’s global sales.

Electric vehicles made up just 1.9% of sales. Toyota bet on transitional technology while competitors rushed into full electrification. That gamble paid off.

The company exported 14.2% more vehicles from Japan to the U.S. The RAV4 SUV remained a bestseller. But manufacturing strategy made the real difference.

Only 20% of Toyota’s U.S. sales relied on imports. Hyundai, by comparison, imported 60% of vehicles sold in America during 2025. This gave Toyota pricing flexibility competitors couldn’t match.

The company absorbed tariff costs instead of passing them to customers. Rivals didn’t have that option.

Financial Performance Despite Headwinds

Tariffs will cost Toyota an estimated $9.7 billion in the fiscal year ending March 2026. That’s a heavy hit. But the company still raised its full-year operating profit forecast.

Cost reductions and strong international demand offset U.S. tariff pressure. Toyota reports fiscal third-quarter earnings on February 6. Analysts expect operating profits to jump nearly 30% year-over-year.

Hyundai told a different story. The South Korean automaker grew revenue over 6% in 2025. But operating profit fell 19.5%. U.S. tariffs cost Hyundai 4.1 trillion won.

Trump threatened Monday to raise tariffs on South Korean vehicles back to 25%. Hyundai shares dropped nearly 5% on the news. The company is racing to boost domestic production at Georgia facilities from 40% to 80% by 2030.

Toyota also posted a 0.2% increase in China sales. That’s the first growth in four years despite fierce competition from domestic EV makers.

The U.S. and Japan markets drove more than 40% of total sales. These regions remain central to Toyota’s global strategy. The combination of hybrid technology and local production proved unbeatable in 2025.

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