Toyota’s car sales decline for seventh month as Chinese market favors EVs

Toyota Motor’s car sales fell again last month due to a prolonged slump in China, where legacy brands are grappling with mounting competition from fast-moving local manufacturers of electric vehicles.

Toyota- and Lexus-brand sales cratered 23% in the world’s biggest auto market in August on weak demand for gasoline and hybrid vehicles, the Japanese manufacturer said Tuesday. That dragged down its global group deliveries, which declined 7.5% from a year earlier.

Toyota and its peers have been contending with a shrinking market in China, where consumers are shying away from expensive purchases due to an ongoing real estate crisis. 

Carmakers are also dealing with uneven demand for EVs, and soaring oil prices triggered by the fighting in the Middle East.

Toyota and Lexus sales rose 2.6% in Europe and 9.1% in Japan amid robust demand for new models, especially hybrids. They declined 4.4% in the U.S. and fell by more than a third in the Middle East.

Earlier this year, Toyota said hybrid sales were on track to exceed 5 million units for the first time in 2026. Alternative power trains have provided the carmaker with a strong arsenal in the U.S., where steep tariffs have all but blocked BYD and other Chinese brands from entering the market.