Toyota's Global Production Falls for Fourth Straight Month as Model Switch and Middle East Crisis Hit Output

Toyota has reported a fourth consecutive monthly decline in global vehicle production, with February output dragged lower by a significant drop in Canadian manufacturing as the company transitions from its outgoing RAV4 to the new generation of the popular sport utility vehicle, Reuters has reported. Worldwide production fell 3.9 per cent year-on-year to 749,673 vehicles. Despite describing overall demand as healthy, the Japanese carmaker said the model changeover on the RAV4, one of its bestselling nameplates globally, was the primary cause of the decline.

The steepest regional decline came in Canada, where output plunged 46.2 per cent. China was down 11.5 per cent, Japan fell 2.6 per cent and the Middle East recorded a 20.4 per cent drop. North America provided some relief, with US production up 3.4 per cent, while European output edged 3.9 per cent higher. The figures cover Toyota's Lexus luxury marque as well as its mainstream range.

Global sales mirrored the production picture, slipping 3.3 per cent to 737,134 vehicles. Overseas sales fell 2.2 per cent, weighed down by a 13.9 per cent decline in China and an 8.3 per cent fall in Japan, though American sales held up, rising 3.2 per cent. Toyota retained its position as the world's leading automaker by volume for a sixth year running in 2025, according to Reuters calculations.

Compounding the February figures, Toyota faces a further production headache in the coming months. 

Earlier, the Nikkei newspaper reported that the company is planning to build close to 40,000 fewer vehicles destined for Middle Eastern markets in March and April, after the US-Israeli military campaign against Iran disrupted cargo shipments through the Strait of Hormuz, the narrow waterway separating Iran and Oman through which a significant share of regional trade passes.

Toyota has already informed parts suppliers of the revised production schedules, according to the report. 

Models expected to bear the brunt of the cuts include the Land Cruiser SUV, alongside saloons and commercial vans. Given that Toyota's monthly vehicle exports to the Middle East run at roughly 30,000 units, the planned reductions would represent somewhere between 60 and 70 per cent of that total. Toyota did not immediately respond to a request for comment from Reuters.