Affected by sharp declines in China and the Middle East, Toyota Motor’s global vehicle sales fell for a third consecutive month in April. While the ratio dropped 3.1% from a year earlier to 849,306 units, the slump overseas stood at a significant 7.5%.
The only sliver lining for Toyota came at the domestic front, as sales rebounded by 24.2% in Japan. Production also rose 3.4% to 933,685 units.
The biggest takeaway from Toyota’s latest sales data has been its more than 90% export slump in the Middle East due to the ongoing Iran war. The automaker, however, has weathered the conflict better than its global peers by keeping factories running despite Hormuz disruptions.
“While demand remains strong, with customers waiting months for some models in major markets, Toyota’s sales also fell compared to last year when they were bolstered by a buying rush ahead of tariffs and the rollout of a new RAV4 sport utility vehicle model. Sales in China, where market conditions remain challenging for Japanese carmakers, shrank 25%,” reported The Japan Times.
Toyota’s domestic rival, Honda Motor’s global sales in April fell 7.9% to 265,215 units, while output was mostly flat globally. Nissan Motor, another Japanese major, too witnessed its sales shrinking 7.6% to 208,663 units.
Talking about Toyota’s export huddles in the Middle East, accounting chief Takanori Azuma, earlier in May, said the manufacturer exports roughly 500,000 to 600,000 vehicles annually to the region and that it was assuming slightly less than half of that volume would be affected.
The official, back then, also forecast an unexpected profit drop for the fiscal year through March 2027, with the automaker bracing for higher raw material costs due to the Iran war-related disruptions.
The outlook for 3 trillion yen (USD 18.8 billion) in operating income fell short of analyst estimates, as well as the 3.8 trillion yen posted in the prior 12-month period.
Toyota’s suppliers have already been complaining about experiencing supply chain disruptions due to the geopolitical volatility in the Middle East. The carmaker too said it would be difficult to offset the 670 billion yen hit that will likely happen due to the Iran turmoil to its bottom line.
There are even reports about the company planning to increase its overseas production cuts to around 83,000 units due to the ongoing logistical problems.