Japanese carmaker Toyota's sales and production both fell in November due to a sharp decline in China, as Beijing discontinues incentives intended to boost sales of electric and fuel-efficient vehicles.
The Japanese carmaker's global sales — including at subsidiaries Daihatsu and Hino — were down 1.9% in November from a year earlier to 965,919 units, Toyota said Thursday.
Production also fell 3.4% year-on-year to 934,001 vehicles in November.
In China, sales of the Toyota and Lexus brands dropped 12% in November, according to the firm, which cited the termination of trade-in subsidies in large cities due to a lack of funding.
China and Japan have been embroiled in diplomatic tensions since November, when Prime Minister Sanae Takaichi made comments on Taiwan that infuriated Asia's largest economy. In response, China issued a warning to its people not to visit Japan.
Last month, Toyota's production rose 15% in Thailand and 9% in the US, but dropped 14% in China, 9.7% in Japan, and 7.9% in the UK.
This month, the EU decided to lift an effective ban on combustion engines, which seemed to give traditional automakers more leeway to develop battery-powered vehicles in large quantities. The EU's modification may provide Chinese electric vehicles (EV) with the opportunity they have been waiting for, even though Toyota and other Japanese automakers, who invented gas-electric hybrid technology, already had an advantage over legacy manufacturers who still rely on gasoline-powered vehicles.
US President Donald Trump has also been targeting the carmaker as he prepares to impose high tariffs on imports to the US of automobiles and auto parts.
Trump declared earlier this month that he was opening the door for the production and sale of lightweight "kei" cars from Asia in the US, even though they do not yet adhere to federal safety regulations.
In an effort to satisfy Trump's demands, Toyota just announced that it will return three American-made cars to Japan.
