Toyota's Production and Sales Decline, Industry Pressure Intensifies
JAKARTA, KOMPAS.com - Toyota Motor Corporation (TMC) reported performance that has not fully recovered at the start of 2026, with global production in February 2026 falling 3.9% year-on-year to 749,673 units.
This correction extends the downward trend for four consecutive months, triggered by slowdowns in China and Japan.
Citing Kyodo, Toyota’s global sales also shrank 3.3% to 737,134 units. This figure marks the first decline in the last three months.
The deepest weakness occurred in China, plummeting 11.5% to 78,457 units, amid tight competition and fewer working days due to the Chinese New Year holidays.
Meanwhile, domestic production in Japan fell 2.6% to 278,916 units, influenced by fewer operational days compared to the same period last year.
In the North American region, production shrank 9.1% to 159,237 units. A significant drop occurred in Canada, slumping 46.2% to 23,173 units, related to adjustments ahead of the sport utility vehicle (SUV) RAV4 model update.
However, performance in the United States still showed a positive trend. Production rose 3.4% to 110,978 units, driven by high demand for electrified vehicles, particularly hybrids.
From the sales side, the global market outside Japan fell 2.2% to 614,870 units. Nevertheless, sales in the United States grew 3.2% to 180,950 units.
In contrast, the domestic Japanese market weakened 8.3% to 122,264 units, pressured by administrative factors ahead of the end of performance-based environmental tax incentives at the end of March.
Sales in China also dropped 13.9% to 82,471 units.
This slowdown signal aligns with warnings previously issued by former Toyota CEO Koji Sato.
He assessed that the automotive industry is currently under great pressure and heading towards a crisis phase. The statement was made in front of hundreds of suppliers at a forum.
He emphasised that the industry landscape is changing very rapidly, from the aggressiveness of Chinese manufacturers to the increasing role of software in vehicles. At the same time, external factors such as geopolitics and tariffs continue to loom.
This situation has led the automotive industry into a survival phase, even for Toyota, which has long been known for its strong manufacturing efficiency and production philosophy.
Looking ahead, improving productivity and efficiency is key. Toyota has begun making adjustments, including relaxing certain quality standards through the ‘Smart Standard Activity’ programme to reduce waste.
This step shows that major players like Toyota also need to adapt more quickly to maintain competitiveness amid increasingly complex industry changes.