Toyota monthly sales fall as China slump enters eighth month

Toyota’s car sales fell in September, dragged down by a monthslong drop in China where higher gas prices are weighing on demand for non-electric vehicles.

Global sales, including those of subsidiary Daihatsu, fell 2.9% from a year earlier to 921,847 units, the company said in a statement Thursday. Production declined 4.5% to 989,168 vehicles.

China, the global auto industry’s leading market, has proven difficult for the world’s biggest carmaker. Strong demand for new or hybrid models let Toyota maintain or even grow its sales in Japan, Europe and the U.S. But sales in China have fallen for eight straight months, fueling the same stretch of declines in broader sales.

Legacy manufacturers have been struggling to compete with Chinese brands churning out battery-powered cars that cater to the demands of customers who want the latest in features and onboard software.

Toyota and Lexus brand sales in China fell 20% in September. Sales edged up 1.8% in Japan and 8.6% in North America, thanks in large part to a rebound in the popularity of gas-electric hybrid vehicles — a technology pioneered by the Japanese carmaker.

In August, Toyota raised its profit outlook for the fiscal year ending March 2027 to ¥3.4 trillion, emboldened by U.S. demand for hybrids and a cushion provided by currency tailwinds. The manufacturer had forecast a rare drop earlier this year as it braced for higher raw material costs stemming from the conflict in the Middle East.

Toyota also said hybrid sales are on track to exceed 5 million units for the first time in 2026.

Meanwhile, Honda’s sales fell 6.5% in September to 271,402 units, including a sharp 53% drop in China.

Nissan saw a 62% decline in China sales last month, with a 10% slump globally.