Toyota reports a decline in sales in November, dragged down by China

Toyota Motor Corp’s sales and production fell in November, largely pressured by a sharp decline in China as the country ends subsidies aimed at boosting sales of electric and fuel-efficient cars.Global sales – including at subsidiaries Daihatsu Motor Co and Hino Motors – fell 1.9% to 965,919 units in the period from a year earlier, the Japanese carmaker said on Thursday. Production shrank by 3.4% to 934,001 vehicles.

Global automakers face greater uncertainty as they navigate an environment of trade tensions, regulatory changes and uncertain economic prospects. Toyota’s results serve as a barometer of the industry’s struggle to balance strong long-term demand with short-term economic and policy headwinds.

Sales of the Toyota and Lexus brands in China fell 12% in November, the company said, citing the end of trade-in subsidies in major cities as funds dried up. The figures were released against the backdrop of diplomatic tensions that have risen between China and Japan since November, when Prime Minister Sanae Takaichi made comments about Taiwan that angered Asia’s largest economy. China responded by warning its citizens not to travel to Japan. Toyota’s production rose 15% in Thailand last month and 9% in the US, but fell 14% in China, 9.7% in Japan and 7.9% in the UK.

The EU’s decision this month to withdraw an effective ban on combustion engines appeared to offer more flexibility to traditional carmakers looking to mass-produce battery-powered cars.