Toyota Global Sales Fall For Third Straight Month Amid Middle East Disruptions
Toyota’s global sales declined for a third straight month in April as Middle East disruptions sharply impacted exports and automotive supply chains.
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Global sales fell for a third consecutive month in April on a year-on-year basis, Toyota Motor said, as the conflict in the Middle East continued to disrupt exports and supply chains across the automotive sector.
Global sales, including subsidiary Daihatsu Motor, fell 3.7 percent from a year earlier to 902,015 units in April, the company said.
However, global production rose 3.4 percent to 933,685 units, The Japan Times reported.
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Export Decline Pressure:
Strains around the Strait of Hormuz disrupted logistics and trade flows in the region, causing Toyota's exports to the Middle East to tumble 92 percent year-on-year to 2,418 vehicles.
Unlike several global manufacturers facing supply chain constraints linked to the conflict, Toyota has managed to keep factories running despite disruption.
"A prolonged disruption could put more pressure on automakers that depend heavily on energy supplies, materials and auto parts linked to the Gulf," industry analysts said.
Demand remains strong around the world, the company said, with waiting times still in place for several vehicle models in key markets.
But last year's strong demand ahead of tariff-driven price hikes and the rollout of the new RAV4 sport utility vehicle weighed on sales comparisons.
Sales in China fell 25 percent as Japanese automakers remain under pressure in the fiercely competitive Chinese market.
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Profit Pressure Mounts:
Honda Motor said global sales dropped 7.9 percent to 265,215 units in April, while Nissan Motor said sales dropped 7.6 percent to 208,663 units.
At Toyota's earnings announcement earlier this month, Chief Accountant Takanori Azuma said the company exports about 500,000 to 600,000 vehicles a year to the Middle East and expected the regional conflict to impact almost half that volume.
Toyota earlier forecast a slide in operating profit for the fiscal year ending March 2027, as soaring raw material prices and supply chain disruptions tied to the Iran conflict weigh on its earnings.
The company projected operating income of ¥3 trillion ($18.8 billion), below analyst expectations and the ¥3.8 trillion in the previous fiscal year.
Toyota suppliers warned of emerging shortages tied to the regional conflict.
The company said it may have difficulty offsetting the estimated ¥670 billion impact of the disruption on its bottom line.
Nikkei said in a recent report that Toyota plans to boost overseas production cuts to roughly 83,000 units due to logistical issues related to regional tensions.
