Toyota pays for scandals, first drop in production in four years

The repercussions of the safety test scandals and the slowdown in demand from China are impacting global production at Toyota, the world's leading carmaker. In the six months between April and September, output posted its first drop in four years, falling 7 per cent from the same period in 2023 to 4.71 million vehicles for the Toyota and Lexus brands, down from the previous record of 5.06 million, when a recovery in semiconductor supply had helped boost global output.

Domestically, the drop was 9.4 per cent to 1.53 million vehicles, after the Yaris Cross and two other models went off the assembly lines for three months following revelations that the company did not fully comply with government standards on vehicle certifications. Also contributing to the drop in volumes was the recall of the Prius hybrid model, the carmaker said.

Production outside Japan fell by 5.8% to 3.17 million vehicles, heavened by minus 17.1% in China, where price competition from local rivals, primarily electric vehicle manufacturer Byd, is intensifying. Volumes from North America fell by 1.7%, while Europe grew by 3.2%. In the same period, global sales fell 2.8% to 5.03 million vehicles, the first decline in two years; the contraction was most pronounced in Japan, down 9.3% to 716,588 vehicles.

Global sales of electric vehicles stood at 78,178 in the fiscal half-year, an increase of 32.5%. Earlier this year, however, Toyota reduced its global electric car production target for 2026 by 30% to around 1 million due to slowing demand.

No announcement effect on the stock, which closed just above par in Tokyo.