Toyota finished 2023 looking like it had things figured out. Japanese automaker finishes the year as the world’s top automaker best selling Automobile manufacturer that sold 11.2 million vehicles across all its companies.

Unlike struggling rivals in Japan, the United States and Europe, Toyota appeared to be thriving in a changing auto market hit by macroeconomic volatility, new competition from China and a pricey shift to electric vehicles. Toyota shrugged investor complaints talked about the slow transition to battery electric vehicles and made a successful move instead betting on hybridsMore suitable for markets such as the USA

But Toyota’s success is starting to stall. In September, Toyota’s overall sales fell 7.4% year over year. Total sales for 2024 have reached 7.4 million vehicles, down 1.9% year-on-year so far, the company said Wednesday.

Toyota’s sales in Japan, its home market, fell 6.3% year-on-year in September, contributing to a 16.9% year-on-year decline in the first nine months of the year. Toyota blamed the domestic recall of its Prius hybrid and the suspension of production of three of its models (Yaris Cross, Corolla Axio and Corolla Fielder).

suspensions It ties back to revelations earlier this year that Toyota, along with several other Japanese automakers, had submitted faulty safety test data to authorities, including pedestrian safety and crash safety tests. Production of the affected models was stopped in June but resumed in early September.

It is the latest scandal involving faulty data to hit Toyota. Toyota in December 2023 stopped Following a security investigation at compact car manufacturer Daihatsu, more than 170 irregularities were discovered in 64 models dating back to 1989.

Toyota is also struggling in China, the world’s largest auto market. Toyota’s sales in China fell 9.2% year-on-year in September, which the company blamed on increased price competition.

Chinese consumers are turning to domestic brands, especially in electric vehicles. Local automakers are engaged in a fierce price war that is squeezing margins across the industry. Foreign automakers such as Volkswagen and GM, which once dominated the Chinese auto industry, are now reporting major declines in Chinese sales.

Toyota in the USA

Toyota has struggled even in the United States, which has been the company’s bright spot for much of the year. Toyota’s US sales are up 6.2% year-over-year so far in 2024. But the automaker’s U.S. sales fell 20.3% in September from a year ago, blamed on recalls and Hurricane Helene.

The company’s hybrids are doing well in the US, where battery electric vehicles are less popular due to cost and lack of charging infrastructure.

Toyota has been skeptical about a rapid transition to battery electric vehicles, instead promoting hybrids as a transitional step. This decision proved prescient as competitors scaling back EV plans due to slow consumer adoption. Toyota’s global hybrid sales have reached almost 3 million units in the year so far; This means an annual increase of 19.8%.

This story first appeared on: Fortune.com