Toyota production falls on car safety scandals, US recalls

TOKYO: Toyota Motor Corp.’s sales fell again after declines in Japan and China put an end to a short-lived recovery, while production was disrupted by domestic scandals and recalls abroad.

Global output, including that of subsidiaries Daihatsu Motor Co. and Hino Motors Ltd., dropped in August by 12.6% from a year earlier to 808,023 units, the company said last Friday.

Global sales fell 3.7% year-on-year following a 0.7% gain in July.

Toyota’s sales fell more than 9% in Japan as it felt the delayed impact of recent regulatory scandals involving falsified vehicle safety certifications, which forced a number of the country’s biggest carmakers to suspend production for affected models.

Its hybrid gas-electric cars saw renewed popularity as demand for electric vehicles plateaued, but a global slump in new car sales and intense competition in China are weighing on the world’s biggest carmaker.

While certain models like its Granvia minivan are proving popular in China, Toyota’s sales in the country fell 13.5% to 152,065 units in August with an ongoing price war with the likes of BYD Co. threatening to further squeeze its market share.

A downturn in EV demand has led some of the world’s biggest automakers to scale back electrification goals.

Last month, a Nikkei report said Toyota had slashed its 2026 annual sales goal from 1.5 million battery EVs, to 1 million.

Toyota sold 12,682 battery EVs in August, all but 119 of which were sold outside of Japan. Meanwhile, it sold 336,848 hybrids that month, a 22% increase from last year.

EV uptake has been slower in the island nation than in other major markets due to the dominance of hybrids and gas-powered cars.

Earlier this week, Toyota expanded the size of its share buyback to ¥1.2 trillion (US$8.3 billion/RM34bil), adding ¥200 billion to a stock-repurchase plan announced in May.

The carmaker’s operating profit for the quarter that ended in June was ¥1.31 trillion, 17% higher than a year earlier. Its hybrid variants are doing well in North America and the weak yen is helping it rake in revenue from abroad.

Honda Motor Co. saw global output fall 11.3% from a year earlier to 307,870 units in August. Its production fell more than 29% in China, where it recently cut jobs and suspended production at three plants.

The Japanese carmaker said in July it was cutting gasoline-car manufacturing by 19% as it looks to hasten its shift toward electric vehicles.

Honda’s global sales dipped 4.7% to 309,477 units.

Nissan Motor Co.’s production fell 15.5% year-on-year to 236,016 units last month, while sales declined by 5.5% to 244,279.

On Thursday, it announced plans to buy back ¥79.9 billion (US$551 million/RM2.3bil) worth of its shares from French carmaker Renault SA as the two look to rebalance their business partnership.