Toyota’s Global Sales Decline in February 2024 and This is WHY!

Toyota Motor’s global sales dropped 7% in February compared to the previous year¹. Toyota’s sales decline is influenced by regional factors, safety scandals, and market dynamics.

However, the company continues to invest in its transformation toward electrification and sustainable growth.

Key Factors

China: A heavy decline in China due to Lunar Year holidays impacted sales significantly. China’s auto market is also engaged in a cut-throat price war, affecting performance.

Japan: A safety test scandal at its small car unit led to a slump in Japan.

Daihatsu: Production stoppages at Daihatsu (which makes some Toyota brand cars) affected domestic sales. Daihatsu had previously admitted to rigging collision safety tests.

Hybrids: Almost two-fifths of the vehicles sold by the Japanese car maker in February were gasoline-electric hybrids.

Despite these challenges, the company’s US sales surged 16%, and Europe sales gained 14%².

Toyota Profit Decline Forecast for FY2025

Toyota forecasts a 20% profit decline in the current financial year (FY2025).

Reasons behind this decline are:

• Investments: It plans to invest in “human capital,” including support for labor costs of suppliers and dealers, as well as investments for its multi-pathway strategy (hybrids, plug-in hybrids, and EVs).
• Transformation: It aims to transform into a mobility company, focusing on electrification and hiring.
• China Challenges: It faces competition from local manufacturers rolling out software-loaded electric vehicles in China.

Despite this, Toyota delivered blockbuster fourth-quarter results in FY2024.

Hybrid Sales and EV Strategy

The company’s traditional strength lies in petrol-electric hybrids. Battery-only EVs made up only 1% of global sales in the previous year, well below their target. Toyota expects to sell 171,000 battery EVs in the current financial year³.

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