Toyota warns of ‘challenging road ahead’ after profit falls £100m
The UK manufacturing arm of Toyota has warned “the road ahead may be challenging” after its profit slumped by more than £100m during its latest financial year.
The division of the Japanese giant said the “uncertainties of the automotive industry and infrastructure to support vehicle type” were the main factors behind its pessimism.
However, Toyota added the future is “also filled with opportunity” as its UK operation “remains committed to meeting consumer expectations”.
The business also said it is “an exciting time to be part of the automotive industry”.
Fewer Toyotas rolling off production line
The warning was included in new accounts filed with Companies House for Toyota Motor Manufacturing (UK), the division which makes the Corolla hybrid at Burnaston in the East Midlands and engines in Deeside, North Wales.
In the year to 31 March, 2025, Toyota made 90,000 Corollas and 243,184 engines, down from 132,591 and 258,768 respectively from the prior 12 months.
As a result, the division’s turnover fell from €3.11bn (£2.7bn) to €2.25bn while its pre-tax profit slumped from €167.4m to €40.4m.
In the accounts, Toyota said both its sales and production volumes fell because of “a stabilisation of output in line with European market demand”.
It said its prior financial year included “elevated volumes” which were driven by “recovery efforts following global parts shortages”.
Toyota added that despite the reductions, it still delivered an operating profit in line with the directors’ expectations.
That operating profit totalled €70.7m for the year, down from €200m.
In terms of the future, Toyota’s Burnaston site is preparing to start production on the GR Corolla in November 2026.
A year ago, it was announced the factory would be the first outside of Japan to manufacture the model.
The division, which is currently operating under peak capacity at Burnaston, is “no longer solely focused on mass vehicle production”.
It has instead diversified into preparing to make the GR model as well as extending the life of a vehicle in response to industry demands.
On its future, Toyota said: “Following the continued successful sales of Corolla in Europe, it is expected that the company will continue to produce the vehicle for European destinations throughout the model life.
“Taking advantage of the success of the hybrid drivetrain and the enhancements offered by the Toyota New Global Architecture platform, investigations into additional customisations are ongoing, with an aim to secure volume and margin over the vehicle lifespan.
“At the same time, the post-production parts business for UK destination Toyota imports has continued to grow and it is anticipated that this business will continue over the coming years.
“More recently, the scope of our activity expanding to use vehicle refurbishment and this area of the business continues to grow.”
Toyota’s sales on the slide
The accounts for Toyota Motor Manufacturing (UK) have been published after those of Toyota GB, which handles national sales and marketing for the company.
Those results, which were released in September, show the division’s profit fell from £11.5m to £462,000 for the 12 months to 31 March, 2025.
Its revenue also declined from £3.5bn to £3.3bn over the same period.
Toyota’s revenue from the sale of new vehicles declined in the year from £2.9bn to £2.7bn while its earnings from used cars edged up from £129.6m to £151.7m.
The car maker’s market share fell from 6.5 per cent to 5.8 per cent in 2024 and further declined to 5.4 per cent in the months to March 2025.
In the accounts, Toyota GB said this was “in line with expectations as the company manages which fleet channels it chooses to operate in and also its compliance with the ZEV [Zero Emission Vehicle] mandate”.
In June, Morning Wire reported that Toyota’s financial services arm’s revenue increased in the year from £941.7m to £1.1bn while its pre-tax profit also rose from £148.8m to £196.5m.
Brits choosing used cars amid ‘economic uncertainty’
In July, FTSE 100 giant Auto Trader said Brits are turning their backs on new cars choosing to buy more older models amid “ongoing economic uncertainty”.
At the time, the Manchester-headquartered company said a “standout trend” of 2025 so far was the “growing appetite for affordable used cars”, particularly those aged between five and 10 years old.
Auto Trader predicted that by the end of the year, there will be 10.1m cars aged between that range s on UK roads – up from 9.2m in 2019 and well above the recent low of 8.7m in 2017.
The business added that vehicles between 10 and 15 years old are also on the rise and are expected to reach 8.5m by the end of 2025, compared to 7.3m in 2019.
It also said that cars at least a decade old are predicted to make up 26 per cent of the UK’s 32.8m cars in 2025, up from 23 per cent in 2019.
UK car market to return to pre-Covid size
Now, Auto Trader has predicted that the UK automotive retail market will return to its pre-pandemic size in 2026.
The company said that after five years of “unprecedented volatility”, it is forecasting 10.2m deals in 2026 – matching the heights last seen in 2019.
According to Autotrader analysis, the UK car market is expected to close 2025 with an estimated 9.8m total transactions, delivering the largest combined new and used market for six years.
Autotrader predicts the used car market will grow a further three per cent year-on-year from 7.9m to reach c.8.2m sales in 2026, continuing its progressive recovery since 2022.
However in contrast, the new car market, which “faces a combination of fierce competition and regulatory pressures such as the ZEV mandate”, is expected to be relatively flat with modest growth of just one per cent, achieving a total of 2m registrations.