Toyota Motor (–7.2%) Global Vehicle Sales Fall for 4th Straight Month Amid China & Middle East Slowdown

Toyota Motor (TM) is navigating its worst multi-month sales stretch in years. Global sales in May, including those of subsidiary Daihatsu Motor Co., fell 7.4% from a year earlier to 885,207 units, pushing the world’s top-selling automaker into a fourth straight month of declines.

The back-to-back slide reflects a perfect storm geopolitical disruption in the Middle East and intensifying EV competition in China. TM stock has not been spared, closing at $167.76 on June 24, 2026, well below its all-time high of $244.46.

May 2026 Sales: The Hard Number

Production also declined alongside sales, falling 5.8% to 857,765 units in May. That marks a significant shift from April, when production rose even as sales fell. The May data shows the pressure is now hitting both sides of the operation.

Key May 2026 metrics at a glance:

• Global sales (Toyota + Daihatsu): 885,207 units, –7.4% year-on-year
• Global production: 857,765 units, –5.8% year-on-year
• US sales (May): 238,800 units, –0.6% year-on-year
• Streak: 4th consecutive month of global sales decline

Toyota's global sales drop 7.2% in May, down for 4th straight month https://t.co/Lo4JpDmHpw

— Kyodo News | Japan (@kyodo_english) June 29, 2026

Middle East: The Sharpest Pressure Point

The Middle East remains Toyota’s most severe regional pain point. Toyota’s exports to the Middle East dropped 92% year-over-year to just 2,418 vehicles as regional tensions disrupted shipping through the Strait of Hormuz.

Toyota planned to cut production of vehicles bound for Middle Eastern markets by nearly 40,000 units across March and April. This affecting popular models including the Land Cruiser, sedans, and commercial vans. The Middle East accounted for roughly 14% of Japan’s global motor vehicle exports in 2025, making the collapse particularly consequential.

China: EV Competition Bites Hard

In China, sales dropped 25.4% in April amid intensified competition and challenging market conditions, as domestic electric-vehicle makers competed aggressively on price, technology, and model launch speed. Japan’s automakers broadly feel this pressure. Honda Motor Co. reported a global sales decline of 7.9% year-on-year to 265,215 units in April, while Nissan Motor Co. saw sales fall 7.6% to 208,663 units. Both Honda (HMC) and Nissan (NSANY) face the same structural headwinds. 

Toyota’s Financial Outlook and TM Stock

For the fiscal year ended March 31, 2026, Toyota’s net revenue increased 5.5% to ¥50.684 trillion, but operating income fell from ¥4.795 trillion to ¥3.766 trillion, and net income dropped from ¥4.765 trillion to ¥3.848 trillion.

Looking ahead, the company is cautious. Toyota forecast operating income of ¥3 trillion (approximately $18.8 billion) for the fiscal year ending March 2027, below analyst expectations and warning it would be difficult to offset the estimated ¥670 billion impact from regional turmoil.

Analysts maintain an average Buy rating on TM with a 12-month price target of $256.52, representing a 54.07% upside from recent prices.

Bottom Line

Toyota Motor’s fourth straight monthly sales decline, with global volumes down 7.4% to 885,207 units in May. This reflects real structural pressure from a near-total collapse in Middle East exports and intensifying China EV competition. With TM trading at $167.76 and operating income guidance cut to ¥3 trillion, the world’s largest automaker faces a tough road through the rest of 2026.

Disclaimer:

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