Japanese automotive giant Toyota Group saw its global vehicle sales decline by 5.3% year-over-year in July 2026, delivering 912,683 units. According to Bloomberg, this marks the sixth straight month of contracting sales figures for the group, which includes its subsidiary Daihatsu. Total global vehicle production for the conglomerate also contracted by 1.4% during the same month, totaling 934,953 vehicles.

The downturn is primarily attributed to several compounding global factors:

Surging Fuel Prices: Elevated oil prices have dampened global demand for traditional combustion-engine vehicles, causing Toyota’s sales in the Middle East to plunge by nearly 45%.

Intensifying Competition in China: Rapidly growing domestic EV manufacturers severely impacted sales, causing combined Toyota and Lexus deliveries in China to drop by 24% in July.

Despite these headwinds, strong demand for hybrid vehicles in Japan and Europe helped offset losses elsewhere, with North American sales remaining relatively stable. Toyota projects its global hybrid vehicle sales will top 5 million units this year. Meanwhile, competing Japanese automakers showed mixed results: Honda expanded global sales by 3.4% thanks to strong US demand, whereas Nissan experienced a 17% decline in overall deliveries.