Toyota global sales fall again as Middle East demand weakens

Monday 27 April 2026 - 12:00

By: Dakir Madiha

Toyota global sales fall again as Middle East demand weakens

Toyota Motor reported a second consecutive monthly decline in global vehicle sales in March 2026, reflecting weaker demand in key regions and disruptions linked to both supply chains and model transitions. The downturn comes despite record production levels, highlighting a widening gap between output and consumer demand.

Global deliveries fell 7.3 percent year on year to 897,871 units. Overseas sales dropped 7.2 percent, while domestic sales in Japan declined 7.8 percent. The sharpest regional contraction occurred in the Middle East, where sales fell by nearly one third to around 34,000 vehicles. Sales also declined in major markets, including an 8.5 percent drop in the United States and an 8.0 percent decrease in China.

A major factor behind the slowdown is the transition to the redesigned Toyota RAV4. The shift from the outgoing model to the sixth-generation version has temporarily reduced availability in dealerships. In the United States, RAV4 sales dropped 47.7 percent in March to 21,693 units as dealers cleared existing inventory while production of the new model ramps up. The updated version, unveiled in 2025, features an exclusively electrified powertrain lineup, but full-scale production is not expected until later this year.

Geopolitical tensions have added further pressure. Escalation of conflict involving Iran disrupted shipping routes through the Strait of Hormuz and affected industrial infrastructure in the region. Damage to aluminum facilities in Abu Dhabi and Bahrain has constrained supply, forcing Toyota to cut production of vehicles intended for Middle Eastern markets by about 20,000 units in March. The disruption has also pushed aluminum prices up by roughly 13 percent since the conflict began.

The longer-term impact could extend across the automotive sector. Japanese manufacturers rely heavily on Middle Eastern aluminum, accounting for around 70 percent of supply. Rising costs are affecting key components such as engines, wheels, and structural parts. Toyota chief executive Koji Sato warned that prolonged disruption could lead to shortages of aluminum and related materials such as naphtha, posing risks to production continuity.

Despite these challenges, Toyota’s global production rose 2.1 percent in March to a record 902,210 units, reversing four months of decline. Output increased 4.9 percent in the United States and 7.7 percent in China, although domestic production in Japan fell 3.3 percent. The divergence between rising production and falling sales suggests inventory buildup as the company prepares to introduce updated models across its lineup.

Supply chain constraints remain a critical concern. A key parts supplier reported that shipments of aluminum from Dubai have stopped entirely, leaving limited reserves that may only last until May. The ability of Toyota to sustain production momentum will depend on how quickly supply disruptions are resolved and whether demand stabilizes in affected markets.