Toyota, a major player in the automotive industry with popular models in India, has achieved a new global sales milestone. In August, the company’s worldwide vehicle sales reached 900,598 units, representing a slight 1% increase year-over-year. Despite this, while overall global sales climbed by roughly 4% and set a monthly record, a substantial drop in demand, exceeding 10%, was observed in Japan.
For the majority of 2025, Toyota experienced a period of rapid expansion. The company’s sales and production data were consistently strong each month. However, this growth slowed in August. The world’s largest car manufacturer, usually resilient even in adverse circumstances, appeared to be struggling due to a downturn in its home market.
Production figures also reflected this pattern. While production saw a nearly 4% rise in August, reaching 837,869 units, the weakness in the domestic market raised questions about whether Japan, a traditionally reliable market, is now feeling the effects of changing consumer tastes and a slowing economy.
Conversely, Toyota demonstrated strong performance in the United States. Sales of Toyota and Lexus models increased by roughly 14% in August, largely driven by the persistent demand for hybrid vehicles. The sales of Battery Electric Vehicles (EVs) increased by 35%, reaching over 17,000 units globally. In stark contrast, only 18 fully electric Toyotas were sold in Japan during August, indicating the slow progression of the local EV market. The situation in China, a key market for Toyota, remained relatively stable. Toyota’s wide range of hybrid vehicles provides it with a competitive edge, although growth has become challenging for most foreign brands.
The imposition of a 15% tariff on imported cars and parts by the United States has led Toyota to reduce its profit projections for the current year. The company now anticipates an operating income of 3.2 trillion yen for the fiscal year ending March 2026, a reduction from the previous estimate of 3.8 trillion yen. This signifies a potential loss of approximately 1.4 trillion yen (US$9.5 billion). This recent report by Toyota signifies a delicate phase. Although strong foreign demand continues to support the company, the decline in Japan highlights the evolving changes in consumer behavior and what consumers are choosing to buy.