Toyota sales fall for six straight months on weak China demand
Intense competition among China's domestic carmakers is crowding out importers, while turmoil in the Middle East has disrupted critical supply routes and sent oil prices soaring.
Toyota's car sales have been declining for six consecutive months, primarily due to weak demand in China, where gasoline prices have risen. In July, global sales fell 5.3% from the previous year to 912,683 units, with production also dropping 1.4% to 934,953 vehicles. Intense competition among Chinese car manufacturers and supply route disruptions caused by Middle East turmoil have contributed to the decline.
Both Toyota and Lexus brand sales in China decreased by 24% year-on-year in July, as domestic brands introduce software-heavy, battery-powered electric vehicles. Middle East sales dropped by nearly 45%, while sales remained relatively stable in North America and increased in Japan and most of Europe, thanks to the growing popularity of gas-electric hybrid cars.
Toyota exports around 500,000 to 600,000 vehicles annually to the Middle East, with almost half of that volume potentially affected. In May, Toyota raised its profit outlook for the fiscal year ending in March 2027 to ¥3.4 trillion, driven by U.S. demand for hybrids and currency tailwinds. The manufacturer had previously forecasted a rare drop earlier in the year due to higher raw material costs stemming from the Middle East conflict.
Toyota reports strong hybrid sales are projected to exceed 5 million units for the first time this year. Alternative powertrains and a weak yen have helped Toyota despite Japanese carmakers struggling to compete with Chinese brands like BYD.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
