Toyota, known for popular vehicles like the Fortuner and Innova in India, has established a new global sales record. In August, the company sold 900,598 vehicles worldwide, reflecting a modest 1% increase compared to the previous year. While global sales saw a rise of approximately 4% and reached a monthly record, demand in Japan experienced a decline of over 10%.
Throughout most of 2025, Toyota demonstrated strong growth. The company consistently reported robust sales and production figures. However, this momentum slowed in August. The world’s leading car manufacturer, typically resilient even amidst challenging conditions, faced setbacks in its home market.
Production figures mirrored the trend. August’s production increased by nearly 4% to 837,869 units. However, the weakness in the domestic market raises questions about whether Japan, traditionally a reliable market for Toyota, is grappling with shifting consumer preferences and a sluggish economy.
Conversely, Toyota showed strength in the United States. Sales of Toyota and Lexus models in the US increased by approximately 14% in August, significantly supported by the continuous demand for hybrid cars. Sales of Battery Electric Vehicles (EVs) also grew by 35%, exceeding 17,000 units globally, but Japan presented a different picture. Only 18 fully electric Toyotas were sold in August, indicating the domestic EV market’s slow progress. China, another major market for Toyota, remained relatively stable. While growth has become challenging for most foreign brands there, Toyota’s extensive range of hybrid cars provides it with a competitive edge.
The imposition of a 15% tariff by the United States on imported cars and parts has prompted Toyota to lower 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. This translates to a potential loss of around 1.4 trillion yen (US$9.5 billion). Toyota’s recent report points towards a delicate phase. While robust international demand continues to sustain the company, the decline in Japan highlights significant changes in consumer preferences and purchasing behavior.