Toyota Motor Corporation, the world’s largest automaker, continues to grapple with production challenges as its global output dropped for the ninth consecutive month in October 2024. While the decline was milder than previous months, significant setbacks in the United States and China have contributed to the downward trend. Despite this, Toyota managed to achieve a glimmer of positivity with its first sales growth in five months, setting a record for October.
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Production Challenges Across Key Markets
In October, Toyota produced 893,164 vehicles globally, marking a 0.8% drop compared to the same period last year. Although this was a significant improvement from the 8% decline recorded in September, the automaker continues to face headwinds in key markets.
United States: Impact of Airbag Issues
One of the steepest declines came from the United States, where production plummeted by 13%. This was largely due to a four-month halt in manufacturing its popular SUV models, the Grand Highlander and the Lexus TX. The disruption stemmed from an airbag issue, which Toyota has now resolved. Production resumed on October 21 at the Indiana plant, and the automaker expects operations to return to normal by January 2025.
China: Fierce Competition and Sliding Output
In China, Toyota’s second-largest market, production fell 9%, reflecting the mounting challenges posed by local competitors. Domestic Chinese automakers have been rapidly gaining market share, particularly in the electric vehicle (EV) sector, where Toyota is striving to keep pace.
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Thailand: Softer Demand Hits Output
Toyota also faced a 13% production decline in Thailand, a key manufacturing hub for the automaker. Weak consumer demand in the region contributed to the slump, highlighting the challenges faced in maintaining robust production levels amid shifting global market dynamics.
A Bright Spot in Japan
While challenges persisted globally, Toyota saw a notable rebound in its home market of Japan, where production climbed 8% in October. This recovery comes after weak numbers a year ago, when a supplier accident forced Toyota to partially halt production at multiple plants. The bounce-back in Japan accounted for roughly a third of Toyota’s global output and provided a much-needed boost to the automaker’s overall performance.
Mixed Results in North America
Despite struggles in the United States, Toyota managed modest production growth in Canada and Mexico, with output rising 2% in both countries. These gains underscore the resilience of Toyota’s operations in North America, even as its U.S. production faced significant disruptions.
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October Sales: A Record-Breaking Month
Amid the production challenges, Toyota achieved a milestone with its first sales increase in five months. Global sales grew 1.4% year-on-year to 903,103 vehicles, setting a record for the month of October. This growth highlights Toyota’s ability to maintain strong demand for its vehicles, even as production lags in key markets.
The October sales figures include vehicles from Toyota’s luxury Lexus brand, which continues to perform well globally. However, the figures exclude group companies Hino Motors and Daihatsu, which operate independently.
Looking Ahead
Toyota’s mixed performance in October underscores the complex challenges facing the global auto industry. The automaker’s ability to rebound in Japan and achieve record sales offers some hope for recovery, but headwinds remain strong in major markets like the United States and China.
With production resuming on critical SUV models in the U.S. and demand stabilizing in other regions, Toyota is cautiously optimistic about returning to more robust production levels in the coming months. The Indiana plant’s full return to normal operations in January is expected to provide a significant boost to output.
However, Toyota will need to address intensifying competition in China, particularly in the EV market, where local brands are gaining dominance. Additionally, efforts to stabilize demand in Thailand and maintain momentum in North America will be key to achieving sustained growth.
Toyota’s Resilience Amid Challenges
Toyota’s ability to navigate production challenges while setting sales records speaks to the automaker’s resilience and adaptability. As the company works to resolve lingering issues and optimize its global operations, it remains focused on meeting demand and maintaining its position as the world’s leading automaker.
While the production decline in October marks a continuation of a tough year, Toyota’s strategic efforts to recover in key markets and capitalize on strong sales demand suggest that brighter days may lie ahead for the automotive giant.
