Toyota Motor Corporation is stepping up its efforts to improve profitability, according to local reports, as the industry faces growing headwinds from the prolonged conflict in the Middle East, import tariffs in the US and rising competition from Chinese automakers. The automaker's new president and CEO, Kenta Kon, told reporters that the company's "break-even volume is high, we want to reverse this." Japan's largest automaker is also facing higher energy costs and rising component prices due to the increase in crude oil prices caused by the war in the Middle East, cancelling out the positive impact of a weaker yen. Mr Kon, who was Toyota's chief financial officer (CFO) before he replaced the outgoing president and CEO Koji Sato in April, confirmed that he expects Toyota's operating margin to drop further to 6.3% in the current fiscal year, which ends in March 2027, down from 7.4% in the previous year.
This compares with an operating margin of 10% in the fiscal year that ended in March 2025. Mr Kon said in a statement that there is still "plenty of room for improvement," with cost-cuts expected to come from greater parts standardisation, better use of plant space and further improvements to working practices including greater use of automation. He also expects the company's lean production system, including its just-in-time delivery system, can be further optimised with the use of artificial intelligence (AI).
The new CEO also told reporters that Toyota is committed to transforming itself from an automaker to a mobility company, while also focusing on flying vehicles and autonomous driving vehicles, adding "we want to create a world where more people can move more easily." "Toyota steps up efficiency drive under new CEO" was originally created and published by Just Auto, a GlobalData owned brand.
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