Toyota Motor Corp. NYSE:TM posted another global sales decline in May as Middle East disruptions and fierce competition in China continued to pressure the world's top-selling automaker. Global sales, including Daihatsu, fell 7.4% from a year earlier to 885,207 units, marking Toyota's fourth straight monthly drop. Production also weakened, slipping 5.8% to 857,765 units.
The Middle East remains a key pressure point for Toyota. The company exports roughly 500,000 to 600,000 vehicles annually to the region, and management had assumed slightly less than half of that volume could be affected. That pressure showed up in May, with Toyota's Middle East sales down 38.6%, while China sales dropped 31.7% as aggressive local EV competition continued to weigh on demand.
The weakness was also visible across Japan's broader auto sector. Honda Motor Co.'s NYSE:HMC global sales fell 4.9% to 283,623 units, including a 52% decline in the Middle East. Nissan Motor Co.'s sales dropped 10.3% to 229,870 units, with sharp declines in Europe and China, while production fell 8.6%. For investors, the numbers could reinforce pressure around Toyota's profit outlook, with the company forecasting 3 trillion in operating income for the fiscal year through March 2027, below the 3.8 trillion posted in the prior 12-month period.