The world’s most profitable carmaker expects its net profit to fall 27 per cent to 1,250b YEN ($12bn).
Despite outselling General Motors in the first quarter, it saw a slide in quarterly profits for the first time in three years.
Income between January and March was down 28 per cent.
The profit warning has been explained by the US downturn and rising input costs.
Katsuaki Watanabe, Toyota president, said that controlling costs in its expanding global operation – as raw material prices rise – would be “a test of our evolution”.
However, the Japanese car manufacturer still expects to surpass General Motors to become the world’s biggest carmaker this year, having just missed out by 3,100 vehicles in 2007.