On 28th March, Reuters reported that Toyota Motors, which stands at the first position globally in the automobile industry, recently experienced a 7 percent slide in their sales globally, led by China and Japan.
Toyota’s global sales dropped by 7 percent in February when compared to last year. The reason stated was the heavy decline in China during Lunar Year Holidays and a slump in Japan after a safety test scandal at its small car unit.
Reason explained for Toyota’s drop in sales
The Lunar New Year holidays played a significant role in the recent dip in Toyota’s global sales, particularly in China. Here’s a breakdown:
Timing: In February 2024, the Lunar New Year holiday fell within that month, whereas it was in January 2023. This shift meant a crucial sales week was missing from February 2024’s figures compared to the previous year.
Reduced Consumer Spending: The Lunar New Year is traditionally a time for festivities and travel, but it often leads to a decrease in spending on big-ticket items like cars. This dampens overall sales during the holiday period.
Whereas, the drop in Japan was attributed to production halts at Daihatsu, a manufacturer of some Toyota brand cars, and the reputational damage from a scandal. It’s worth noting that Daihatsu brand vehicles are not included in Toyota’s global sales count. also played a part in reducing the sales overall. Japanese transport officials raided a Toyota-affiliated plant Tuesday after the company admitted to cheating on engine testing, as Toyota Motor Corp. reported it sold over 11 million vehicles in 2023 to retain its status as the world’s top car manufacturer.
The safety testing scandal in its small car division of Toyota is one of the major reason for drop in sales. Sales in China tumbled 36% with China being the biggest automobile market. Toyota’s China sales are slumping due to a brutal price war among automakers.
Impact of slip in sales
In January and February combined, the sales decline in China was slight at 0.7%, contrasting with the overall sector’s 6.4% rise in passenger vehicle sales, as reported by an auto industry association. Toyota experienced a significant 16% surge in U.S. sales and a 14% increase in Europe for February. However, sales in Japan plummeted by a third.
China sold over 83,000 units in February this year when compared to 129,600 last year, in 2023.
In January and February combined, the decline in sales in China was relatively mild, registering at 0.7%. This contrasts with the broader passenger vehicle sales sector, which saw a notable increase of 6.4%, according to data from an auto industry association.
Toyota experienced divergent sales trends across different regions in February. While its U.S. sales surged by an impressive 16% and European sales saw a solid gain of 14%, the Japanese market witnessed a significant downturn, with sales plummeting by a third.
The decline in domestic sales can be attributed to various factors, including production stoppages at Daihatsu, a manufacturer of some Toyota brand cars, and the reputational fallout from recent scandals. It’s worth noting that despite the association with Toyota, Daihatsu brand vehicles are not included in Toyota’s global sales count.
The sales picture for Toyota in Southeast Asian markets also painted a challenging picture, with double-digit declines observed in Indonesia and Thailand. However, it’s noteworthy that almost 40% of Toyota’s global sales in February comprised gasoline-electric hybrids, indicating a continued demand for eco-friendly vehicles.
When considering global sales figures, it’s important to understand that they encompass both Toyota brand cars and those sold under its luxury Lexus brand. In contrast, separate figures for Daihatsu revealed a staggering 66% plunge in worldwide sales for February. According to another data from Daihatsu, the company’s global sales volume plummeted 66% in February.
Additionally, Toyota’s global production for February contracted by 2.6%, resulting in a total output of 737,178 vehicles. These figures shed light on the intricate dynamics of the automotive industry, reflecting both regional challenges and broader market trends that impact a leading automaker like Toyota.
Comments 1