Toyota to reduce overseas output by 100,000 vehicles by around Feb. 2027

2026-06-23

Toyota Motor will cut overseas production by about 100,000 vehicles by around February 2027. After U.S. and Israeli attacks on Iran, the de facto closure of the Strait of Hormuz has dragged on, disrupting logistics bound for the Middle East. Demand is also weakening in China and elsewhere as fuel costs rise.

Production cuts for Middle East and Asia

Regarding overseas production, Toyota had planned to reduce output by about 83,000 vehicles from June through around November. By the 23rd, Toyota had notified major parts suppliers of revisions to its production plans, mainly cutting gasoline vehicles for the Middle East and Asia. For the Middle East, it had already reduced domestic production by about 40,000 vehicles over the two months of March and April.

China and domestic production see mixed increases and cuts

In China, demand remains weak amid rising fuel costs. Toyota will cut production of gasoline versions of the RAV4 sport utility vehicle, or SUV, and the Avalon sedan, while also reducing the low-cost EV bZ3X, the bZ7 sedan and the Camry sedan in a market where electric vehicles are the mainstay, as intensifying competition takes hold.

Meanwhile, in Japan, it will increase production by 4,200 vehicles from July through December compared with its May plan. The decline in demand for China will lead to cuts in the Lexus ES luxury sedan, but increased production of the RAV4 and the Land Cruiser 250 SUV will support output. On the morning of the 3rd, it halted operations at 13 domestic plants because of Typhoon No. 6, but it aims to make up the lost output through recovery production.

At present, expectations are rising that the Strait of Hormuz will normalize after an interim agreement toward ending the fighting between the U.S. and Iran. However, demand-side weakness such as restrained purchases due to higher energy prices is gradually becoming apparent. Toyota and Lexus production for the year ending March 2027 is seen at 10 million vehicles, up 1% from the previous year, while consolidated net profit under International Financial Reporting Standards is projected to fall 22% to 3 trillion yen, drawing attention to whether those targets can be achieved.

Enjoyed this article? Share it with your network!