Toyota global sales fall for 4th month as Iran conflict disrupts production

Toyota Motor’s global vehicle sales declined for a fourth month in a row in May, as disruptions linked to the Iran conflict weighed on operations in the Middle East and weaker demand in China added further pressure.

The Japanese automaker sold 885,207 vehicles worldwide in May, including figures from its small-car subsidiary Daihatsu Motor, down 7.4% from the same month last year, according to company data released on Monday.

Global production also decreased, falling 5.8% year-on-year to 857,765 units.

The figures showed continued strain on Toyota’s international operations as the company faced the combined impact of geopolitical disruption, logistics uncertainty and intensifying competition in key markets.

Sales in the Middle East dropped 38.6%, reflecting the impact of the regional conflict on shipments and demand. In China, Toyota’s sales fell 31.7% from a year earlier, as domestic electric vehicle producers continued to gain ground in the world’s largest auto market.

Although Washington and Tehran reached an agreement to end the conflict, shipping activity through the Strait of Hormuz has been recovering gradually, keeping pressure on transport routes used by automakers and other manufacturers.

Toyota earlier indicated that Middle East is a significant export market for the company, with annual shipments to the region estimated at around 500,000 to 600,000 vehicles. The company said in May that it expected a substantial share of those exports to be affected by the disruptions.

The automaker has also warned of lower earnings for the fiscal year ending March 2027, citing rising raw material costs and supply-related pressures. Toyota expects operating profit to fall to ¥3 trillion ($18.8 billion), compared with ¥3.8 trillion the previous fiscal year.