Toyota Motor Corporation reported a third consecutive monthly decline in global sales for March, as weakness in key markets such as China and the Middle East offset robust demand for hybrid vehicles. The Japanese automaker's global sales dropped by 2.1% year-on-year to 903,000 vehicles in March, according to company data released on Thursday.
Regional Sales Performance
Sales in China, the world's largest auto market, fell by 10.3% to 145,000 units, marking the steepest decline among major regions. The decline was attributed to intensifying competition from domestic electric vehicle manufacturers and a sluggish economy. In the Middle East, sales plunged by 15.6% to 43,000 vehicles, impacted by geopolitical tensions and economic uncertainties.
However, Toyota's performance in North America and Europe showed resilience. North American sales rose by 4.1% to 237,000 units, supported by strong demand for the RAV4 and Camry hybrids. European sales increased by 3.2% to 107,000 vehicles, driven by the popularity of the Yaris Cross and Corolla hybrids.
Hybrid Demand Remains Strong
Despite the overall sales decline, Toyota's hybrid electric vehicles continued to gain traction globally. Hybrid sales surged by 12% to 345,000 units, accounting for 38% of total sales. The company's battery electric vehicle sales remained modest at 13,000 units, but Toyota reaffirmed its commitment to expanding its EV lineup.
Production also faced challenges, with global output dropping by 1.5% to 920,000 vehicles. The decline was partly due to supply chain disruptions and a temporary shutdown at a factory in Japan following a quality inspection issue.
Outlook and Strategy
Toyota maintained its full-year sales forecast of 11.2 million vehicles, but cautioned that uncertainties in key markets could pose risks. The automaker is accelerating its electrification strategy, planning to introduce 10 new EV models by 2026 and targeting annual sales of 1.5 million EVs by that year.
Analysts note that while Toyota's hybrid strength provides a buffer, the company faces mounting pressure to compete in the rapidly growing EV segment, particularly in China where domestic brands like BYD dominate. The company's strategy of focusing on hybrids and hydrogen fuel cells may need to be recalibrated to meet evolving market demands.
