Affected by ongoing Middle East tensions, Toyota has announced a reduction of 830,000 units in its overseas production target for June-November 2026. Toyota expects fiscal year 2026 pure ICE vehicle sales to decline 16.4% year-over-year, with growth momentum shifting to hybrids. The Middle East conflict has driven oil prices to surge, accelerating the global shift toward new energy vehicles.

Production Cut Plan: The Supply Chain Crisis Behind 83,000 Units

According to Caixin Weekly, Toyota has announced a reduction of its June-November 2026 overseas production target by 83,000 units due to Middle East tensions. This is one of Toyota's largest overseas production cut plans since the 2020 pandemic.

Specific reasons for the reduction include:

• Hormuz Strait shipping disruptions: Approximately 20% of global oil transport passes through this strait; shipping interruptions have caused energy and raw material transport costs to soar
• Parts supply chain disruptions: Multiple Tier 1 suppliers are located in the Middle East or rely on Middle East logistics corridors
• Terminal demand decline: High oil prices have suppressed consumer willingness to purchase traditional ICE vehicles, with Toyota's Middle East sales down 16.8% in the first four months

ICE Vehicle Sales Expected to Decline 16.4%

Toyota predicts that fiscal year 2026 (April 2026-March 2027) pure ICE vehicle sales will decline 16.4% year-over-year. This forecast is based on the following judgments:

1. Oil prices remain elevated long-term: Since late February 2026, international oil prices have surged and remained at high levels, significantly increasing the cost of fuel vehicle operation
2. NEV substitution is accelerating: Multiple global markets are seeing NEV penetration rates rapidly break through critical points
3. Consumer preferences are shifting: Younger consumers are increasingly favoring low-energy, intelligent mobility solutions

Vehicle Type	FY2025	FY2026 Forecast	Change
Pure ICE	~6.8M	~5.68M	-16.4%
Hybrid	~3.2M	~3.8M	+18.8%
PHEV/BEV	~450K	~620K	+37.8%

Toyota's growth momentum will primarily come from hybrid vehicles, not pure ICE vehicles.

The "Replacement Window" for Chinese Automakers

Toyota's production cuts create a rare market replacement window for Chinese automakers, especially NEV manufacturers:

• Latin America: Toyota's first four-month sales fell 5.5% to 150,000 units; Brazil sales fell 14.5% to 54,000 units
• Australia: Toyota sales fell 22.1%, the largest decline in recent years
• Southeast Asia: Chinese automakers are building factories in Thailand, Indonesia, and Malaysia, directly competing with Toyota's traditional strongholds

In 2026, Chinese automakers like Changan and Geely are launching hybrid vehicles based on new energy vehicle technology. This may pose a fundamental threat to Japanese automakers like Toyota—in Toyota's strongest hybrid domain, Chinese automakers are catching up or even surpassing.

Procurement Recommendations for Central Asian / Russian Dealers

For dealers in Central Asia and Russia, Toyota's production cuts mean:

1. Toyota supply may tighten: June-November production cuts may extend delivery cycles for popular models
2. Alternative brand opportunities: Chinese brand PHEV and BEV models offer greater competitiveness in fuel consumption, configuration, and pricing
3. Inventory strategy adjustment: Appropriately increase Chinese brand NEV inventory to reduce dependence on a single brand

Dimension	Toyota Hybrid	Chinese PHEV (e.g., BYD DM-i)	Chinese BEV
Fuel consumption	4-5L/100km	1-2L/100km	0
Pure electric range	None	100-200km	400-700km
Smart features	Moderate	Rich	Rich
Price	Higher	Moderate	Moderate
After-sales network	Mature	Rapidly expanding	Rapidly expanding

Through platforms like EX1000.COM, Central Asian and Russian dealers can access Toyota reduction dynamics, detailed specifications for Chinese brand alternative models, and supply lead times, enabling timely procurement strategy adjustments.