On June 27, Toyota Motor Corporation announced its global production and sales for May. According to the data, Toyota's global sales in May were 840,681 units, a year-on-year increase of 0.3%, of which 102,071 units were sold in Japan, a year-on-year decrease of 12.7%, and overseas market sales were 738,610 units, a year-on-year increase of 2.4%. As of May, Toyota's global sales in 2024 were 4,039,177 units, up 0.01% year-on-year.
It is understood that this is the fourth consecutive month of decline in Toyota's sales. Based on previous data, Toyota's global sales fell 0.5% year-on-year in April, 2.1% year-on-year in March, and 7.0% year-on-year in February, the first year-on-year decline since January 2023. Toyota said the main reasons for the decline include Daihatsu's response to recalls, a long-term stagnation in production and shipments of the Prius, and significant sales pressure in the Chinese market.
In the global market, Toyota's sales in Japan in May were 102,071 units, down 12.7% year-on-year, due to the long-term stagnation in production and shipments of the Prius. In other markets, Toyota's sales in North America continued to show rapid growth, with sales of 253,322 units, up 14.9% year-on-year, of which 216,620 units in the U.S. market, up 15.7% year-on-year, and Canada and Mexico also achieved year-on-year growth, but these two markets did not account for a high proportion of overall sales. The same was true in Europe, where Toyota sold 96,593 units, up 7.3% y/y, with France and Germany both soaring, with France seeing the largest increase of 60.0% y/y to 13,032 units.
Compared with the above two markets, Toyota is in a "hard battle" in the Central and South Asian markets, which is also the main source of the decline in Toyota's global sales. According to the data, Toyota's sales in the Central and South Asian markets in May were only 256,744 units, down 6.9% year-on-year, and 225,700 units, down 15.1% year-on-year, of which 140,377 units were sold in the Chinese market (including Hong Kong), down 13.6% year-on-year, but increased month-on-month compared with April. According to Toyota, despite the launch of new sales activities, the severe market environment, such as increased price competition, continued and decreased compared to the same period last year. According to retail data, Toyota sold more than 10,000 models in China in April, namely Fenglander, RAV4 Rongfang, Veranda, and Corolla Ruifang, with sales of 21,300, 14,300, 12,800, and 12,500 respectively, followed by Camry and Highlander, with 8,681 and 8,120 respectively.
I have to admit that Toyota's future in the Chinese market is worrying. First of all, from the perspective of product layout, Toyota is almost a blank in the field of new energy vehicles, with the penetration rate of new energy vehicles in the Chinese market exceeding 50%, consumers' acceptance of new energy vehicles is getting higher and higher, and Toyota has been slow to launch competitive new energy products, which makes Toyota's space in the Chinese market smaller and smaller, and its competitiveness is gradually weakening.
Secondly, from the perspective of the dealer network, Toyota also faces a huge challenge. Due to the decline in sales, many dealers are facing huge operating pressure, and many have withdrawn from the network or are on the verge of withdrawing from the network. With the disappearance of the dealer network, Toyota's domestic sales will show a downward spiral.
Of course, we can't ignore Toyota's performance in other markets, including North America and Europe. However, these growth cannot overshadow the challenges faced by Toyota in the global market, where domestic brands are rapidly expanding their market share in Southeast Asia, the Middle East, South America, and other regions, and Toyota's sales in these markets may be hit.
2024 is a critical year for new energy vehicle companies to gain a firm foothold, and the competition is destined to be very fierce. With the rapid increase in the penetration rate of new energy vehicles, the scale of the traditional fuel vehicle market is gradually shrinking, and the contradiction between the huge traditional production capacity and the shrinking fuel vehicle market has brought more fierce price wars. Scale determines the cost and the survival status of the enterprise, and most manufacturers give priority to ensuring their share, which will inevitably lead to further intensification of price competition.
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