Toyota, known for selling popular vehicles like the Fortuner and Innova, has set a new global sales record. In August, the company sold 900,598 vehicles worldwide, marking a modest 1% increase from the previous year. While global sales saw nearly a 4% increase, setting a monthly record, the company experienced a decline in demand exceeding 10% in Japan.
Throughout most of 2025, Toyota had been experiencing rapid growth. The company’s sales and production numbers were robust each month, but this momentum slowed in August. The world’s largest car manufacturer, which usually remains stable even in difficult times, was facing challenges in its domestic market.
Production followed a similar pattern. Production in August rose by about 4%, reaching 837,869 units, but the weakness in the home market raises questions about whether Japan, traditionally a stronghold for Toyota, is now impacted by changing consumer preferences and economic slowdown.
In contrast, Toyota saw positive performance in the United States. Sales of Toyota and Lexus models in the US increased by approximately 14% in August, significantly boosted by continued demand for hybrid cars. Sales of Battery Electric Vehicles (EVs) increased by 35% to over 17,000 units globally, whereas the situation in Japan was different. Only 18 fully electric Toyotas were sold in August, suggesting the slow progress of the domestic EV market. China, a significant market for Toyota, remained relatively stable. Despite the challenges faced by most foreign brands in achieving growth there, Toyota’s hybrid car range gives it strength.
The United States has imposed a 15% tariff on imported cars and parts, which has led Toyota to reduce its profit forecast for the current year. The company now projects an operating income of 3.2 trillion yen for the fiscal year ending March 2026, down from the previous estimate of 3.8 trillion yen, indicating a potential loss of around 1.4 trillion yen (US$9.5 billion). Toyota’s new report highlights a delicate phase. Strong international demand is still supporting the company, but the decline in Japan reveals significant shifts in consumer preferences.