On the Dash:
- Toyota’s global sales fell 1.1% in June, marking a fifth straight monthly decline.
- Weakness in the Middle East and China offset gains in North America and Japan.
- Toyota now forecasts ¥3 trillion ($18.4 billion) in operating profit, down from ¥3.8 trillion ($23.3 billion) last year.
Toyota posted its fifth consecutive month of declining global sales in June, as fallout from Middle East supply disruptions and a steep slowdown in China continued to squeeze the world’s largest automaker.
Global sales, including subsidiary Daihatsu Motor Co., also fell 1.1% year over year to 926,688 units, the company reported Thursday. Production rose 2.2% to 984,408 vehicles. Notably, the Toyota and Lexus brand sales fell 24% in the Middle East and 27% in China in June compared with a year earlier.
The pressure stems largely from the ongoing conflict between the U.S., Saudi Arabia and Iran, which has disrupted shipping routes and pushed up oil and raw-material costs across the industry. Toyota exports an estimated 500,000 to 600,000 vehicles a year to the Middle East. The company has said it expects slightly less than half of that volume to be affected by the disruptions.
The strain is now showing up in the company’s full first-half results. Toyota Group companies sold 5.39 million vehicles worldwide from January through June, down 2.8% from a year earlier and marking the group’s first first-half sales decline in two years. However, the automaker still outsold Volkswagen’s 4.13 million units to retain the global sales lead for a seventh straight year.
Exports from Japan to the Middle East decreased by 36% in the first half, totaling 104,093 vehicles. Meanwhile, domestic sales in Japan increased by 4.4% to 1.10 million units, driven by strong demand for the new bZ4X electric model.
Toyota has forecast a profit decline for the fiscal year ending March 2027, projecting ¥3 trillion ($18.4 billion) in operating profit. That’s down from ¥3.8 trillion in the prior period and below analyst estimates.
The trend extends across Japan’s auto industry as Honda’s June sales rose 1.3% to 289,172 units, but sales in China fell 44%. Additionally, Nissan reported an 8.3% sales decline to 240,345 units, with production down 14.5%.
For U.S. dealers, the numbers point to a market where hybrid demand and North American sales volume remain steady even as Toyota manages global supply pressure tied to the Middle East conflict and softening demand in China.
