Toyota sales fall again as Middle East, China drag demand
Toyota’s April sales fell for a third month as China and Middle East weakness offset stronger output and a Japan rebound
Toyota Motor Corp reported a third consecutive monthly fall in global sales in April, as sharp declines in China and the Middle East outweighed a rebound in Japan and pointed to growing pressure on the world’s largest automaker.
Sales of Toyota and Lexus vehicles fell 3.1% year on year to 849,306 units in April, while broader global sales including subsidiaries Daihatsu and Hino dropped 3.7% to 902,015 vehicles.
The decline reflected weaker demand in several key overseas markets. Middle East sales plunged 33.7% to just over 31,000 vehicles, while sales in China dropped 25.4% amid tough market conditions. In the United States, Toyota’s largest market, sales slipped 4.6%.
Japan was the main bright spot. Domestic sales rose 24.2% after earlier purchase delays ahead of a change in environmental tax rules, helping soften the impact of weaker overseas demand.
Toyota’s production performance was stronger than its sales figures. Toyota and Lexus global production rose 2.0% in April from a year earlier, supported by a 12.9% increase in Asia that helped offset declines in the United States and Japan.
The broader Toyota group, including Daihatsu and Hino, produced 933,685 vehicles in April, up 3.4% year on year, according to figures reported from the company’s monthly data.
Middle East shock hits a key profit region
The Middle East has become one of Toyota’s most difficult pressure points this year, as conflict-related disruption has affected shipping routes, vehicle deliveries and regional demand.
Reuters previously reported that Toyota planned to cut production of vehicles bound for Middle Eastern markets by nearly 40,000 units in March and April because of logistics concerns linked to disruption through the Strait of Hormuz.
That planned reduction affected popular models including the Land Cruiser, sedans and commercial vans.
Reuters, citing Nikkei, said the cut represented around 60-70% of Toyota’s normal export volume to the region, where the company typically ships about 30,000 vehicles a month.
The latest April figures suggest the disruption is no longer limited to factory planning or logistics.
It is now showing up directly in Toyota’s sales performance, with the Middle East recording the steepest regional decline among the major markets reported.
Toyota had already reported a second straight monthly sales decline in March, when global sales fell 7.3% to 897,871 vehicles. Reuters said the March weakness was driven partly by a sharp Middle East slump and a model changeover for the RAV4 sport utility vehicle.
China remains another major drag
China is also weighing heavily on Toyota’s global sales. The April drop of 25.4% came as foreign automakers face increasingly intense competition in the world’s largest auto market, where domestic electric-vehicle makers have been competing aggressively on price, technology and model launch speed.
China’s wider auto market has also been under pressure. Reuters reported earlier this month that domestic car sales in China fell for a seventh straight month in April, dropping 21.6% year on year to 1.4 million vehicles, according to the China Passenger Car Association.
For Toyota, the combination of Middle East disruption and China weakness is testing two very different parts of its business: one shaped by geopolitical logistics risks, and the other by structural competition from fast-moving Chinese brands.
Profit outlook already under strain
The April sales decline comes after Toyota reported weaker earnings for the financial year ended March 31, 2026. Consolidated vehicle sales rose by about 233,000 units to around 9.595 million, while net revenue increased 5.5% to 50.684 trillion yen.
However, operating income fell from 4.795 trillion yen to 3.766 trillion yen, and net income decreased from 4.765 trillion yen to 3.848 trillion yen.
Toyota has forecast consolidated vehicle sales of 9.60 million units for the fiscal year ending March 31, 2027, with operating income projected at 3.0 trillion yen and net income also forecast at 3.0 trillion yen.
In its financial presentation, Toyota said it had secured profit in the latest year despite major external pressures, but warned that it was likely unable to absorb newly added impact from the Middle East in the next financial year.
The company also identified US tariffs, labour costs, research and development expenses and wider cost pressure among factors affecting operating income, alongside the need to accelerate medium- and long-term changes to make the business more resilient.
Production resilience may not be enough
Toyota’s April figures show that the company is still managing production better than sales.
Output rose even as demand weakened in China, the Middle East and the United States, suggesting that Toyota’s manufacturing base remains resilient despite geopolitical disruption.
But rising production does not remove the risk from weaker demand.
If Middle East logistics disruption persists and Chinese competition continues to intensify, Toyota may face more pressure on inventories, pricing and regional allocation decisions in the months ahead.
The company remains supported by scale, hybrid demand and a diversified global production network.
Still, April’s third straight monthly sales decline shows that even Toyota is not immune to the combined pressure of conflict-related disruption, weaker overseas demand and a more competitive global auto market.
