According to the latest data released by Toyota on May 28, the company’s global vehicle sales in April totaled 902,015 units (including its subsidiary Daihatsu), a 3.7% year-over-year decline; meanwhile, production for the same period rose 3.4% year-over-year to 933,685 units. This marks the third consecutive month of year-over-year decline in Toyota’s global sales.
Due to the ongoing spread of supply chain disruptions triggered by the conflict in the Middle East, Toyota’s exports to the region have plummeted. In April, Toyota’s exports to the Middle East plummeted 92% year-on-year to just 2,418 units. At an earnings briefing earlier this month, Toyota CFO Takanori Azuma stated that the company typically exports approximately 500,000 to 600,000 vehicles to the Middle East annually and expects nearly half of its Middle East export business to be affected.
According to a recent report by the Nikkei, Toyota plans to increase its overseas production cut to approximately 83,000 vehicles due to logistics challenges caused by tensions in the Middle East.
With raw material costs rising due to the turmoil in Iran, Toyota expects profits to decline in the current fiscal year ending March 2027. The company forecasts an operating profit of 3 trillion yen (approximately $18.8 billion), which not only falls short of market analysts’ expectations but is also significantly lower than the 3.8 trillion yen recorded in the previous fiscal year.
Toyota’s upstream suppliers have issued warnings that the conflict in Iran has already begun to cause material shortages. Toyota acknowledged that the turmoil in the Middle East has resulted in a 670 billion yen loss to the company’s profits, a shortfall that is difficult to make up.
However, compared to other automakers, Toyota has been relatively less impacted by the current Middle East conflict. Despite shipping disruptions in the Strait of Hormuz, the company’s factories have continued to operate normally. Yet if tensions persist and supply shortages worsen, Toyota’s resilience will face a severe test. This also highlights the high dependence of global automakers on the Gulf region for parts, raw materials, and energy supplies.
Currently, demand for new vehicles in major markets remains strong, with waiting periods of several months for some Toyota models. However, last year’s high sales baseline—driven by a pre-tariff buying spree ahead of U.S. tariff policies and the launch of Toyota’s all-new RAV4 SUV—is one reason for the year-over-year decline in Toyota’s global sales so far this year.
It is worth noting that Japanese automakers are facing overall pressure in the Chinese market, with Toyota’s April sales in China falling 25% year-over-year.
In addition to Toyota, other Japanese automakers have also seen sales declines. Honda’s global sales in April fell 7.9% year-over-year to 265,215 units, while global production remained largely unchanged from the same period last year. The latest data released by Nissan shows that its April sales totaled 208,663 units, a 7.6% year-over-year decline.
