Toyota and Lexus brand sales cratered 23% in the world’s biggest auto market in August on weak demand for gasoline and hybrid vehicles, the Japanese manufacturer said Tuesday. That dragged down its global group deliveries, which declined 7.5% from a year earlier.

Toyota and its peers have been contending with a shrinking market in China, where consumers are shying away from expensive purchases due to an ongoing real estate crisis. Carmakers are also dealing with uneven demand for EVs, and soaring oil prices triggered by the fighting in the Middle East.

Honda Motor Co’s global sales fell 9.2% in August, dragged down by a 50% slump in China. Nissan Motor Co’s deliveries in the country plummeted 52%, resulting in a global sales decline of 17.5%.

Toyota and Lexus did better elsewhere, with sales rising 2.6% in Europe and 9.1% in Japan thanks to robust demand for new models, especially hybrids. They declined 4.4% in the US and fell by more than a third in the Middle East.

Earlier this year, Toyota said hybrid sales are on track to exceed five million units for the first time in 2026. Alternative powertrains have provided the Japanese carmaker with a strong arsenal in the US, where steep tariffs have all but blocked BYD Co and other Chinese brands from entering the market.

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