Toyota Motor’s car sales fell for a sixth straight month as rising gasoline prices weighed on demand for non-electric vehicles in China. Global sales in July, including those of subsidiary Daihatsu Motor, fell 5.3% from a year earlier to 912,683 units, the company said in a statement Friday. Production declined 1.4% to 934,953 vehicles.
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. The pressure is straining global manufacturers, forcing even Toyota to cede ground in China, the world’s largest car market, since February. Toyota and Lexus brand sales in July were down 24% year-on-year in China, where domestic brands are churning out software-heavy, battery-powered electric vehicles.
Middle East sales fell by almost 45%. Sales were relatively flat in North America, and up in Japan and across most of Europe, thanks in large part to the resurging popularity of gas-electric hybrid cars. Toyota exports roughly 500,000 to 600,000 vehicles annually to the Middle East.
The manufacturer said in May that it expects almost half of that volume to be affected. Last month, Toyota raised its profit outlook for the fiscal year ending in March 2027 to ¥3.4 trillion, emboldened by U.S. demand for hybrids and a cushion provided by currency tailwinds. The manufacturer had forecast a rare drop earlier this year as it braced for higher raw material costs stemming from the Middle East conflict.
Toyota said hybrid sales are on track to exceed 5 million units for the first time during this calendar year. Alternative powertrains and a weak yen have been a saving grace for Toyota, even as Japanese carmakers struggled to keep up with BYD and other domestic brands in China.
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