Trade Wars Hit Auto Industry Why Toyota is Down 1.9% Globally
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| Photo by Dusty Barnes on Unsplash |
Toyota’s November slump a 1.9% drop in global sales and a 3.4% contraction in production is a direct casualty of the volatile intersection between policy expirations and geopolitical friction. The primary drag is China, where Toyota and Lexus sales plummeted 12% as government trade in subsidies evaporated, exposing the market's heavy reliance on state incentives to move metal. However, the headwinds are not purely economic; they are compounded by deepening diplomatic fallout following Prime Minister Sanae Takaichi’s remarks on Taiwan. Beijing’s retaliatory travel warnings are cooling consumer sentiment for Japanese brands, signaling that Toyota’s struggles in Asia’s largest economy are now as political as they are financial.
Beyond Asia, the automaker is maneuvering through a minefield of shifting Western regulations that threaten to upend its global strategy. While the EU’s decision to soften its combustion engine ban offers a temporary reprieve for Toyota's hybrid heavy lineup, it paradoxically risks opening the door wider for Chinese EV competitors to seize market share. Simultaneously, Toyota is engaged in a high stakes appeasement strategy with the United States, opting to ship American made models back to Japan to mitigate President Donald Trump’s threatened tariffs. This defensive posturing, combined with Trump’s unorthodox push for lightweight "kei" cars in the US, highlights a new reality: legacy automakers must now design corporate strategy around political whims as much as consumer demand.