Toyota posts sales drop in November, dragged down by China
Global automakers are facing greater uncertainty as they navigate an environment of trade tensions, regulatory changes and uncertain economic outlooks
[TOKYO] Toyota Motor’s sales and production fell in November, weighed down in large part by a sharp drop in China as the country discontinues subsidies meant to boost the sales of electric and fuel-efficient cars.
Global sales, including at subsidiaries Daihatsu Motor and Hino Motors, fell 1.9 per cent in the period from a year earlier to 965,919 units, the Japanese carmaker said on Thursday (Dec 25). Production shrank 3.4 per cent to 934,001 vehicles.
Global automakers are facing greater uncertainty as they navigate an environment of trade tensions, regulatory changes and uncertain economic outlooks. Toyota’s results serve as a barometer for the industry’s struggle to balance strong long-term demand with short-term economic and policy headwinds.
Toyota and Lexus brand sales in China fell 12 per cent in November, the company said, citing the end of trade-in subsidies in major cities as funds ran dry. The figures were released against a backdrop of diplomatic tensions that have been brewing between China and Japan since November, when Prime Minister Sanae Takaichi made remarks about Taiwan that angered Asia’s biggest economy. China responded by warning its citizens against travelling to Japan.
Toyota’s production in Thailand climbed 15 per cent last month and 9 per cent in the US, but fell 14 per cent in China, 9.7 per cent in Japan and 7.9 per cent in the UK.
The European Union’s decision this month to pull back an effective ban on combustion engines appeared to offer more flexibility to legacy carmakers seeking to mass-produce battery-powered cars.
While Toyota and other Japanese carmakers, which pioneered gas-electric hybrid technology, already had an edge over legacy makers that remain dependent on pure-gasoline cars, the EU’s revision could give Chinese electric vehicles (EVs) the opening they have been waiting for.
Meanwhile, the company has been in US President Donald Trump’s crosshairs as he prepared to impose steep tariffs on cars and car parts imported to the US. Earlier this month, Trump said that he was paving the way for Asia’s lightweight “kei” cars to be made and sold in the US, even though they currently don’t meet federal safety standards for new vehicles.
More recently, Toyota said that it’s going to ship three models produced in America back to Japan, a gesture aimed at accommodating Trump’s wishes.
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Honda Motor’s November results were also dragged down by China, as well as the lingering impact of a semiconductor shortage spurred by a political tussle between China and the Dutch over a chipmaker in the Netherlands.
The carmaker’s sales in November fell 15 per cent to 273,681 units; that included a 34 per cent drop in China, where the carmaker has seen declines for 22 straight months. Production in North America fell 61 per cent, the company said, due to an ongoing chip crunch that recently forced it to temporarily close plants in Japan and China over the year-end holidays.
Nissan Motor’s global production fell 4.2 per cent to 257,008 units during the same month, but grew 22 per cent in China thanks to the popularity of a few EVs it released there earlier this year, including the N6 and N7. Sales fell 4.9 per cent globally in November. BLOOMBERG
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