Toyota reported declining global vehicle sales for the second consecutive month in March, blaming a sharp drop in the Middle East and a model changeover for the RAV4 SUV for dwindling deliveries.
The company said global vehicle sales shrank 7.3% from the same month a year ago to 897,871 vehicles, including sales of the Lexus luxury brand. In Japan, Toyota sales fell 7.8% to 142,225 units, while in overseas markets they were down 7.2% to 755,646 units.
US Sales Affected by RAV4 Changeover, Tariffs
Toyota
In the United States, Toyota and Lexus sales dropped 8.5% to 211,617 units, with the automaker noting in the sales report that the decline was “due to a rebound from last year’s pre-tariff-driven demand, as well as the impact of the changeover to the all-new RAV4.” The automaker added that demand for hybrids and other models remained solid.
According to a Toyota spokesperson cited by CBT News, there was a RAV4 supply issue, not a demand problem. The shortage is due to a production gap at Toyota’s Kentucky assembly plant, which has not yet fully retooled for the redesigned 2026 RAV4. For this reason, Toyota sold just 21,693 RAV4 SUVs in the US in March, compared to 41,509 a year ago. Year-to-date RAV4 sales stand at 59,869, down from 115,402 through the same period last year.
In China, sales fell 8% to 142,706 units, with Toyota noting that sales remained on par with the previous year “amid an increasingly competitive market environment.” Toyota sales in China were supported by solid demand for models such as the Avalon and Camry. Toyota’s Europe sales remained relatively steady, with a drop of 5.6% to 113,875 units.
Middle East Sales Dropped by a Third Amid Regional War
Toyota
But the biggest decline by far was in the Middle East, where Toyota and Lexus sales collapsed by nearly 33% to 33,919 units. Toyota did not provide a reason for the sharp decline in sales in the region, but it’s safe to assume that had a lot to do with shipping disruptions in the context of the U.S.-Israeli war against Iran. Iran has blocked cargo ships from using the Strait of Hormuz, making it more difficult to deliver cars to buyers. The Middle East is a relatively small market for Toyota.
Despite the dwindling sales, Toyota’s global production rose 2.1% in March from a year earlier, with stronger growth of 4.9% in the US and 7.7% in China. Production dropped 3.3% in Japan.
According to Reuters calculations, Toyota was the world’s top-selling automaker for the sixth straight year in 2025 with 10.5 million units. In the fiscal year that ended on March 31, the Japanese automaker racked up record global sales of 10.48 million vehicles, achieving its highest-ever US deliveries and hybrid volume. When its subsidiaries Daihatsu Motor and Hino Motors are included, Toyota’s total sales amounted to 11.28 billion, up 2.5% year-on-year and also a record.
