Toyota Motor secured its position as the world’s top-selling automaker for the fifth consecutive year in 2024, selling 10.8 million vehicles globally.
However, despite maintaining its lead over rivals like Volkswagen Group, Toyota’s total group sales fell by 3.7%, driven by governance issues in Japan and price pressures in China.
The decline was particularly sharp in Japan, where Toyota faced scrutiny over certification irregularities at its subsidiaries, including Daihatsu.
Meanwhile, in China—the world’s largest car market—Toyota struggled against aggressive pricing from domestic electric vehicle (EV) makers.
The company’s hybrid segment remained a bright spot, with hybrid models comprising 40.8% of its parent-only sales.
Toyota’s main competitor, Volkswagen, reported a 2.3% decline in sales for 2024, with global deliveries just over 9 million units.
While Volkswagen is pushing cost-cutting measures in Europe and intensifying its EV strategy, it continues to face headwinds in key markets, particularly China.
Source: Reuters
Toyota navigates certification scandal fallout in Japan
Toyota’s parent-only vehicle sales, encompassing its namesake and Lexus brands, declined 1.4% in 2024 to 10.2 million units.
The drop was primarily linked to Daihatsu’s testing scandal, which prompted the suspension of production for multiple models.
The controversy forced Toyota to tighten governance measures, but it also dented consumer confidence in the brand.
Daihatsu, Toyota’s compact car subsidiary, has been particularly affected, facing a sharp sales slump after admitting to manipulating safety test data.
Toyota has pledged to overhaul its compliance framework, but its domestic sales trajectory remains uncertain.
Meanwhile, Toyota’s truck subsidiary, Hino Motors, also saw a decline in sales, adding to the broader downturn in Japan.
The automaker’s struggle to recover its reputation domestically could pose long-term challenges, especially as the Japanese market shifts toward electrification and stricter regulatory oversight.
Hybrid success bolsters Toyota amid China’s EV price war
While Toyota saw an overall decline in sales, its hybrid lineup continued to drive growth, particularly in overseas markets.
Hybrid models accounted for a record 40.8% of Toyota’s parent-only sales in 2024, reflecting strong demand in regions such as the United States and Europe.
The US market has been particularly receptive to Toyota’s hybrid offerings, as consumers seek fuel-efficient alternatives without fully transitioning to battery electric vehicles (BEVs).
This trend has helped Toyota mitigate losses in China, where sales dropped by 6.9% due to intense price competition from domestic EV brands like BYD.
Despite China’s aggressive push towards electrification, Toyota’s EV sales remain a small fraction of its total sales, with battery-electric vehicles accounting for just 1.4%.
The company has been slower than some rivals in scaling up its EV strategy, instead focusing on hybrid models as an interim solution.
With China’s market increasingly favouring fully electric vehicles, Toyota may face growing pressure to accelerate its BEV production.
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