The world's top-selling automaker, Toyota Motor (NYSE:TM), is not exempt from the intense competition permeating the Chinese auto market.
What Happened: Toyota said on Wednesday that it sold 928,056 vehicles in China, Hong Kong, and Macau in the seven months till the end of July, marking a year-on-year drop of 10%. The sales numbers include the company's luxury brand, Lexus.
The Japanese automaker said that sales in the region were affected by "severe market conditions" including intensifying price competition. The company implemented sales activities such as enhancement measures over the past month, but couldn't pull its sales up to meet the numbers from 2023, it added.
Toyota's worldwide sales are down 0.8% this year as of the end of July at 5,750,240 units. While its sales outside of Japan have increased by 3.1% in the period, its sales within its home ground have dropped by a significant 19%.
Why It Matters: Toyota is not the only automaker affected by the tough market conditions in China. According to data from the China Passenger Car Association (CPCA), American EV giant and the world's top EV seller Tesla's retail sales in China in the January-July period were 324,544 units, down 0.3% year-on-year, as reported by CnEVPost.
Chinese EV giant BYD Co Ltd, however, said earlier this month that its passenger vehicle sales rose 29% year-on-year to 1,947,944 units in the seven months as of the end of July.
The EV market in China is currently witnessing heightened competition as EV makers slash prices on their offerings in a bid to retain share amidst market weakness. The drawn-out price war, however, is weighing heavily on the companies' margins.
EVs form a significant chunk of China's overall auto market. According to data from the CPCA, about half of all the vehicles sold in China last month were either battery electric vehicles or plug-in hybrids.
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