Toyota has lost customers in China for eight consecutive months. Electric vehicles are not yet sufficient.
Toyota sold almost a fifth fewer cars in China than last year. Its electric vehicles are growing rapidly worldwide, while the automaker’s overall performance continues to decline.
Toyota’s Chinese customers are dwindling
Toyota is facing tough times in the world’s largest auto market. Its sales in China fell for the eighth consecutive month in September. In the first three quarters, it sold just over 1.05 million vehicles there, a 18.9% drop year-on-year.
The automaker points to weaker demand for gasoline and hybrid vehicles in China as the main reason. It has long relied on these powertrains in its product lineup. The rapid electrification of the local market forces it to make significant adjustments to its portfolio.
China has long been Toyota’s second-largest market after the United States. This year, Japan itself surpassed it in the first nine months with 1.19 million vehicles sold. For the manufacturer, this is another sign of shifting market dynamics.
Electric vehicles are growing more than twice as fast
Toyota’s electric lineup is also gaining customers worldwide. Together with Lexus, it sold 309,766 battery-powered electric vehicles from January to September. This represents a significant increase of 127.4% compared to the same period last year.
Modernized models like the Toyota bZ4X and Lexus RZ, along with an expanded lineup, are helping. Toyota has added models such as the C-HR+, bZ4X Touring, and Urban Cruiser. Lexus also offers an electric ES, giving customers more vehicle options to choose from.
Electric vehicles still account for a relatively small share of the overall sales for both brands. Out of approximately 7.51 million cars sold this year, they make up around 4.1% according to the figures provided. There is still significant room for further growth in this segment of the lineup.
Decline in China affects global results
Toyota and Lexus’s global sales dropped by 3.4% on a year-over-year basis in the first nine months. In September alone, the automaker delivered 860,107 vehicles, 2.2% fewer than a year earlier. This marked the third consecutive month of global sales decline.
The rapid growth of electric vehicles has not yet been able to offset the loss of customers in other segments of its portfolio. China’s situation thus illustrates how challenging it can be to shift sales composition even for manufacturers with Toyota’s long-standing strength.
In the Chinese market, Toyota partners with automakers GAC and FAW. Through joint ventures, it offers electric models such as the bZ3, bZ3X, bZ5, and bZ7. This local lineup plays a crucial role in competing with domestic brands for customers.
A new electric Lexus is set to help
The next step is expected to be an electric SUV from the Lexus brand produced directly in China. According to reports in August by Nikkei, production is planned to begin in the fall of 2027. It will be manufactured at a new factory in Shanghai to help strengthen the local lineup.
The new model is also set to utilize gigacasting technology, which allows large structural components to be created as a single casting. Toyota expects this approach to simplify production and reduce costs. Price is a key competitive factor in the Chinese market.
For Toyota, it will be important to turn growing interest in electric vehicles into higher sales volumes. Expanding its product range and producing locally are intended to help it better meet the needs of Chinese customers. Results in the coming months will show whether it is possible to slow down the decline.
Sources:
Original text / Elektrickevozy.cz
Toyota
Electrek
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