Toyota sales slip as Japan automakers warn of Iran supply chain impact

Toyota Motor Corp. sales dipped slightly in February, hurt by fierce competition in China’s electric-vehicle market and weak demand at home in Japan — with the downturn preceding any impact from the Iran conflict.

Global sales in February — including those of subsidiaries Daihatsu Motor Co. and Hino Motors Ltd. — fell 2.3% from last year to 806,905 units, the company said Monday.

Toyota and Lexus brand sales fell 13.9% in China, while production there shrank 11.5%, mainly because of the timing of this year’s Lunar New Year holiday.
While the world’s biggest carmaker has held steady despite a global slowdown in EV demand and the cost of US tariffs on cars and parts, the bigger test for the auto industry will be the degree of disruption from the Middle East conflict that erupted on Feb. 28.

Japanese carmakers, which source roughly 70% of their aluminum from the region, have been dialing back production as supply chains become more unpredictable.

Earlier this month, the Japan Automobile Manufacturers Association said the conflict is beginning to affect deliveries and supplies. Domestic manufacturers exported roughly 800,000 automobiles to the Middle East in 2025, which amounts to about ¥2.5 trillion ($15.6 billion), according to the industry group.

Shifting shipping lanes from the Strait of Hormuz, now blocked off, to South Africa’s Cape of Good Hope would almost double delivery times to about 100 days, JAMA said.

Toyota and Nissan Motor Co. have signalled that they plan to reduce production in March, while Honda Motor Co. will counteract export reductions in the Americas, Japan and Thailand by ramping up local production in those countries, according to NHK, Japan’s national broadcaster.

Separately, Toyota’s joint ventures in China are planning to recall more than 560,000 sport utility vehicles to address a defect in second-row seats that could risk passenger collision safety.

Toyota and local partner Guangzhou Automobile Group Co. will recall 317,990 Highlander vehicles beginning April 1, according to China’s State Administration for Market Regulation on Friday. Its joint venture with China FAW Group Co. will recall 242,170 Crown Kluger SUVs.

This is part of a global recall of about 1.23 million vehicles, a spokesperson for Toyota said. About as many cars in North American were impacted as China, according to the company.

Honda’s global sales fell 6.6% to 249,414 units in February, the carmaker said Monday. That included a 15.2% drop in China. Nissan saw sales drop 7.4% that month, with a particularly sharp 19.4% decline in China.