Toyota Motor reports its fiscal 2026 first-half results on Thursday, covering April to September. Global sales fell 4% to 5.059 million vehicles, the first year-on-year decline in two years, as strong hybrid demand in North America was outweighed by a sharp slump in China.
Production for the six months came to 4.895 million vehicles, down 1.9%. Higher material costs and a weaker yen are both in play as the company prepares to report.
Hybrids sell in North America, Europe and Japan
Gasoline prices have stayed high as the situation in the Middle East deteriorates, lifting demand for fuel-efficient hybrids in North America, Toyota's largest market. Sales there rose 1.8% to 1.539 million vehicles, and Toyota managed it while holding down sales incentives — the discounts that eat into margins.
Hybrid-led demand also kept Europe up 1.4% and Japan up 12.4%.
China drags
Sales in China fell 25.1% to 685,000 vehicles as a slowing economy cooled the new-car market. Toyota's lineup is weighted toward hybrids and other combustion-engine cars, and demand for those has fallen further than for new energy vehicles such as electric cars.
Costs up, currency helps
Aluminum and other material prices have risen on the Middle East situation, and memory chip prices are climbing as demand concentrates in AI and data centers.
The currency is running the other way. The average exchange rate for the six months is around 159 yen to the dollar, against 146 yen a year earlier. A one-yen fall in the yen is estimated to add roughly 50 billion yen to Toyota's annual operating profit.
Investors will be watching how management frames the outlook, including the effect of protectionism in various markets.