Toyota March sales drop 7.3% as key regions weaken

Toyota Motor Corporation said on Monday that its global vehicle sales declined for a second consecutive month in March 2026, citing softer demand across several major markets and a production changeover for its RAV4 SUV.

The company reported worldwide sales of 897,871 vehicles in March, including its Lexus brand, a 7.3% decrease from a year earlier. Toyota said the downturn was broad across both its domestic and international operations, while adding that underlying demand remained stable despite the reported weakness.

Regional declines led by the Middle East

Toyota said overseas sales fell 7.2% year-on-year in March, while sales in Japan dropped 7.8%. The company’s figures showed the steepest regional contraction in the Middle East, where March sales fell by nearly one-third to about 34,000 vehicles.

Toyota did not give a specific reason for the Middle East decline. Separately, other automakers have pointed to reduced car demand in the region tied to disruptions from the U.S.-Israeli conflict against Iran, which they said has affected shipments through the Strait of Hormuz and weighed on broader economic activity.

U.S. and China sales also fall as RAV4 transition continues

Toyota reported declines in two of its largest overseas markets. In the United States, March sales were down 8.5%, and in China sales decreased 8.0%, the company said.

Toyota linked part of the overall sales impact to the shift in production from the previous RAV4 model to a new version. The company said such changeovers can temporarily limit availability as factories adjust, though it did not quantify the effect in its report.

Production rises even as sales soften

While sales fell, Toyota said global production increased 2.1% in March from a year earlier. The company attributed the rise to gains in major overseas manufacturing hubs.

Production increased 4.9% in the United States and 7.7% in China, while output in Japan declined 3.3%, Toyota said. The combination of lower sales and higher production underscored how short-term demand shifts and logistics conditions can diverge from manufacturing trends across regions.

Uncertainties around timing and regional demand

Toyota’s update left open questions about how long the Middle East weakness may persist and how quickly the RAV4 production transition will normalize supply. With no additional detail on the Middle East drop and no quantified estimate for the model-changeover impact, investors and industry watchers are likely to focus on upcoming monthly updates for signs that sales patterns stabilize.