Toyota sales fall for fifth month on Iran turmoil and China

Toyota Motor’s global sales fell slightly after turmoil in the Middle East and a slump in China led the world’s biggest carmaker to record a drop for the fifth month in a row.

Global sales in June, including those of subsidiary Daihatsu Motor, fell 1.1% from a year earlier to 926,688 units, the company said Thursday. Production climbed 2.2% to 984,408 vehicles.

Soaring oil and raw-material costs, along with disrupted supply routes, are squeezing global manufacturers as the U.S. and Saudi Arabia trade blows with Iran in a conflict that has dragged on for months. The strain on Japanese carmakers underscores their heavy reliance on the Middle East, while fierce competition from BYD and other electric-vehicle manufacturers is adding to volatile sales in China.

“Solid demand in North America and Japan was offset by lower sales in China,” the carmaker said in a statement. “In North America, demand for hybrids and other models remained strong.”

The disruptions, compounded by intense competition in China, has started to erode Toyota’s record profit from the past fiscal year. Toyota and Lexus brand sales in June were down 24% in the Middle East and 27% in China from a year earlier.

At Toyota’s earnings announcement in May, the manufacturer said it exports roughly 500,000 to 600,000 vehicles annually to the Middle East, and that it was assuming slightly less than half of that volume would be affected.

Toyota has forecast a dip in profit for the fiscal year through March 2027 as it braces for higher raw material costs due to the disruptions. The outlook for ¥3 trillion ($18.4 billion) in operating profit fell short of analysts’ estimates, as well as the ¥3.8 trillion posted in the prior 12-month period.

Honda Motor’s global sales rose 1.3% to 289,172 units in June, the company said Thursday, though the gain masked a sharp 44% drop in China. Production fell more than 6%.

Nissan Motor reported an 8.3% decline in June sales to 240,345 units, with output down 14.5%.