Toyota may be the world’s top automaker for six years running, but the new CEO Kenta Kon believes the company may be building too many models and variants.
Since becoming Toyota’s CEO on April 1, Kon-san has been touring the company’s factories, research and development centres, and sales offices to suss out where efficiencies and improvements can be made.
Although Toyota grew its lead over the second-placed Volkswagen Group to roughly 2.3 million vehicles in 2025, the company’s profits are faltering. Due to increasing competition from Chinese manufacturers, the costs of EV development, and tariff wars emanating from the USA, Toyota is forecasting a 20 per cent drop in operating profit for the financial year ending March 2027.
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The US division, which has typically been a cash cow for the company, fell into the red for the financial year just past as EV costs and tariffs bit hard.
According to Automotive News, Kon-san told shareholders recently, “If you go to a development division, you see issues such as an increasing number of different specifications and variants being created, which in turn is driving up costs.”
Speaking to Reuters after he was elected to the company’s board last week, Kon-san noted the automaker is keen to avoid “hitting the brakes suddenly”, so it may be a while before we learn which models face the axe.
In the short term it’s likely the company will simplify variant and specification offerings for existing models. That said, the company has already cancelled development of an electric successor to the Lexus IS based on the LF-ZC concept car.
Toyota has previously committed itself to giving its regions more autonomy, allowing them to react more nimbly to unique local circumstances. Each of Toyota’s major markets — North America, China, Japan, Europe and south-east Asia — have models that are specially designed to fit their needs.
Examples include kei cars in Japan; the Aygo X for Europe; Innova and Avanza in Asia; and Tundra, Tacoma, Sequoia, 4Runner, Highlander, Grand Highlander in North America.
Prior to becoming CEO in April this year, Kenta Kon served as the company’s chief financial officer, a position he took up in 2020. He has a bachelor’s degree in economics, and has had senior roles overseeing general administration, human resources, advanced engineering, and research and development.
Unlike Toyota’s last two CEOs — Koji Sato and Akio Toyoda — Kon-san is not a self-confessed “car guy”.