NAGOYA - Toyota Motor Corp.'s top executive vowed to strengthen its "earning power," with the industry facing headwinds from U.S. tariffs and the prolonged conflict in the Middle East.
Toyota's break-even volume is "slightly high," Toyota CEO and President Kenta Kon said in a recent meeting with media organizations, adding that "We want to reverse it."
Kon, who had a long career in accounting and served as the company's chief financial officer, became the CEO of the world's largest automaker by volume in April, replacing Koji Sato.
Toyota said last week it expects its operating profit margin to fall to 6.3 percent in the year through March 2027 from 7.4 percent the previous year when the margin dropped for the second consecutive year. The figure was 11.9 percent in the year ended March 2024.
Higher U.S. tariffs on cars and parts and a surge in oil product prices triggered by the U.S.-Israel war on Iran added pressure on profitability, canceling out the positive effect of the weaker yen.
Among cost-cutting measures, Toyota aims to reduce part types, Kon said, which is expected to allow the company to use plant space more efficiently and help improve productivity.
"I believe that worksites are where Toyota creates value and earn money," Kon said.
"There is plenty of room for improvement," he said.
Toyota, known for its lean production system with its just-in-time principle, will use artificial intelligence and more robots in production, Kon said.
But humans will play an even more central role, he said, adding that "The value of what only people can do will increase."
As Toyota aims to transform itself from an automaker to a mobility company, Kon said the company will also focus on flying cars and autonomous driving technologies.
"We want to create a world where more people can move more easily," he said
