Toyota hits brakes on overseas production amid US-Iran conflict fallout

Japanese automaker Toyota Motor Corporation plans to further reduce vehicle production outside Japan, aiming to manufacture 100,000 fewer cars by February next year due to the impact of the US-Israel conflict with Iran, despite ongoing negotiations between the parties.

The company is facing weaker demand and rising fuel and logistics costs linked to disruptions to shipping through the Strait of Hormuz. Models affected by the planned production cuts include the RAV4 SUV and Avalon sedan. Toyota has already informed parts suppliers of the revised production plans, Nikkei Asia reports.

Nikkei Asia noted that the signing of a memorandum of understanding between the United States and Iran aimed at ending hostilities has improved prospects for resolving shipping disruptions in the Strait of Hormuz. However, consumers are continuing to delay purchases because of persistently high energy prices.

According to the publication, Toyota had originally planned to produce around 10 million Toyota and Lexus vehicles by the end of March 2027 and generate a net profit of approximately $18.6 billion.

The outlet previously reported in May that the automaker intended to reduce overseas vehicle production by 83,000 units by November this year.

By Jeyhun Aghazada