Global sales at eight major Japanese automakers fell 2.6 percent in May to 1.97 million units, data from the companies showed, as a deepening slump in China and disruptions linked to the Strait of Hormuz erased gains in Japan and India. Toyota Motor, including its Daihatsu subsidiary, posted a 7.4 percent drop to 885,207 vehicles, its fourth consecutive monthly decline, while production contracted 5.8 percent. Honda’s sales halved in the Chinese, Middle Eastern and African markets, and Nissan reported a double-digit fall. The figures mark a widening divergence inside the industry: Suzuki rode robust Indian demand to a 23.2 percent increase, and Subaru and Mazda advanced on the back of strong US deliveries.

Viewed from Tokyo, the immediate pressure emanates from the Middle East, where the Strait of Hormuz crisis has moved beyond energy markets to disrupt the logistics corridors on which Asian exporters depend. Toyota ships roughly 500,000 to 600,000 vehicles annually to the region; its sales there tumbled 38.6 percent in May, and Honda’s fell 52 percent. The company’s accounting chief, Takanori Azuma, signalled in May that nearly half that volume could be affected. The disruptions are also feeding into higher raw-material costs, compressing margins for manufacturers that had only recently posted record profits.

In China, the world’s largest auto market, Japanese brands are losing ground to domestic electric-vehicle producers. Toyota’s sales in the country sank 31.7 percent, and Honda’s halved, as buyers shifted toward local marques such as BYD, Geely, Changan and Chery. The same dynamic is reshaping Europe, where registration data for May show demand for battery-electric, plug-in hybrid and full-hybrid vehicles rising while petrol and diesel sales contracted. That pivot has benefited Tesla and Chinese entrants, intensifying the squeeze on traditional European and Japanese manufacturers in a region long dominated by Volkswagen, BMW and Mercedes-Benz.

Toyota has already forecast a decline in operating profit to ¥3 trillion for the fiscal year through March 2027, below analyst estimates and the ¥3.8 trillion posted in the prior period, citing higher input costs and supply-chain uncertainty. The Strait of Hormuz remains only gradually reopening, with vessel attacks still flaring, leaving the industry’s logistics exposure unresolved. The next factual milestone is whether the disruption to Middle Eastern trade routes persists into the third quarter, and how quickly Japanese automakers can restructure their China strategies as local EV competition intensifies.