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Why Did Toyota's Global Vehicle Sales Fall for a Fourth Month?
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Key Takeaways
Toyota's global vehicle sales fell 7.2% in May, marking a fourth straight month of year-over-year decline.
TM's China sales dropped 31.7%, while Middle East sales fell 38.6%, weighing on global results.
Toyota forecasts lower fiscal 2027 retail sales and operating income despite higher expected revenues.
Toyota Motor Corporation’s (TM - Free Report) global vehicle sales declined for the fourth straight month in May, as weak demand in China and the Middle East dragged down overall performance.
Worldwide sales fell 7.2% year over year to 834,279 vehicles. International sales decreased 9.6%, while domestic sales in Japan increased 11.1%, supported by strong demand for models including the RAV4 and bZ4X.
Regionally, sales in China tumbled 31.7% due to challenging market conditions, partly due to higher gasoline prices, while sales in the Middle East dropped 38.6%. In the United States, Toyota's largest market, sales were nearly flat, slipping just 0.6%.
Global vehicle production fell 5.5% year over year, as lower output in the United States and Asia, down 3.8% and 13.3%, respectively, outweighed higher production in Japan. The figures include the sales and production of Toyota's luxury brand, Lexus.
Per the automaker, overall demand remained stable, but year-over-year production declined because some manufacturing facilities operated for fewer days during the month.
For fiscal 2027, Toyota projects total retail vehicle sales of 11.18 million units, indicating a decline from 11.28 million units sold in fiscal 2026. Fiscal 2027 sales are expected to total ¥51 trillion compared with ¥50.68 trillion recorded in fiscal 2026. Operating income is projected to be ¥3 trillion, indicating a contraction of 20.3% year over year.
Pretax profit is estimated to be ¥4.23 trillion, implying a decline from ¥5.12 trillion generated in fiscal 2026. R&D expenses are envisioned to be ¥1.6 trillion compared with ¥1.52 trillion spent in fiscal 2026. Capex is forecasted to be ¥2.3 trillion compared with ¥2.39 trillion spent in fiscal 2026.
The Zacks Consensus Estimate for GELHY’s 2026 sales and earnings implies year-over-year growth of 77.1% and 40.3%, respectively. The EPS estimate for 2026 and 2027 has improved 18 cents and 7 cents, respectively, over the past 30 days.
The Zacks Consensus Estimate for PLOW’s 2026 sales and earnings implies year-over-year growth of 16.7% and 31.4%, respectively. The EPS estimate for 2026 and 2027 has improved 39 cents and 29 cents, respectively, over the past 60 days.
The Zacks Consensus Estimate for GTX’s 2026 sales and earnings implies year-over-year growth of 5.6% and 20.4%, respectively. The EPS estimate for 2026 has improved 12 cents over the past 60 days, while the EPS estimate for 2027 has improved a penny over the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Why Did Toyota's Global Vehicle Sales Fall for a Fourth Month?
Key Takeaways
Toyota Motor Corporation’s (TM - Free Report) global vehicle sales declined for the fourth straight month in May, as weak demand in China and the Middle East dragged down overall performance.
Worldwide sales fell 7.2% year over year to 834,279 vehicles. International sales decreased 9.6%, while domestic sales in Japan increased 11.1%, supported by strong demand for models including the RAV4 and bZ4X.
Regionally, sales in China tumbled 31.7% due to challenging market conditions, partly due to higher gasoline prices, while sales in the Middle East dropped 38.6%. In the United States, Toyota's largest market, sales were nearly flat, slipping just 0.6%.
Global vehicle production fell 5.5% year over year, as lower output in the United States and Asia, down 3.8% and 13.3%, respectively, outweighed higher production in Japan. The figures include the sales and production of Toyota's luxury brand, Lexus.
Per the automaker, overall demand remained stable, but year-over-year production declined because some manufacturing facilities operated for fewer days during the month.
For fiscal 2027, Toyota projects total retail vehicle sales of 11.18 million units, indicating a decline from 11.28 million units sold in fiscal 2026. Fiscal 2027 sales are expected to total ¥51 trillion compared with ¥50.68 trillion recorded in fiscal 2026. Operating income is projected to be ¥3 trillion, indicating a contraction of 20.3% year over year.
Pretax profit is estimated to be ¥4.23 trillion, implying a decline from ¥5.12 trillion generated in fiscal 2026. R&D expenses are envisioned to be ¥1.6 trillion compared with ¥1.52 trillion spent in fiscal 2026. Capex is forecasted to be ¥2.3 trillion compared with ¥2.39 trillion spent in fiscal 2026.
TM’s Zacks Rank & Key Picks
Toyota currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Geely Automobile Holdings Limited (GELHY - Free Report) , Douglas Dynamics, Inc. (PLOW - Free Report) and Garrett Motion Inc. (GTX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GELHY’s 2026 sales and earnings implies year-over-year growth of 77.1% and 40.3%, respectively. The EPS estimate for 2026 and 2027 has improved 18 cents and 7 cents, respectively, over the past 30 days.
The Zacks Consensus Estimate for PLOW’s 2026 sales and earnings implies year-over-year growth of 16.7% and 31.4%, respectively. The EPS estimate for 2026 and 2027 has improved 39 cents and 29 cents, respectively, over the past 60 days.
The Zacks Consensus Estimate for GTX’s 2026 sales and earnings implies year-over-year growth of 5.6% and 20.4%, respectively. The EPS estimate for 2026 has improved 12 cents over the past 60 days, while the EPS estimate for 2027 has improved a penny over the past 30 days.