Toyota's New CEO Says the Company Has Too Many Cars: He Is Probably Right.
Toyota's new CEO Kenta Kon took charge in June 2026, succeeding Akio Toyoda who had run the company since 2009. Speaking at Toyota's 122nd annual shareholder meeting and later to reporters, Kon said: "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."
He added that Toyota would avoid hitting the brakes suddenly, signalling a measured approach rather than immediate model cuts. But the intent is clear: the sprawling product matrix is in his sights.
Toyota sold approximately 10.8 million vehicles globally in 2025, making it the world's largest automaker by volume for the fourth consecutive year. The CEO of the world's biggest car company saying his own development divisions are generating too many specifications to manage efficiently is not a routine statement. It is an admission of structural cost pressure from the top.
Kon's diagnosis is specifically about configurations and specifications, not just the number of nameplates. Globally, across Toyota, Daihatsu, and Hino, the group offers more than 100 vehicles. In the United States alone, Toyota lists 32 models when hybrid and non-hybrid versions are counted separately, plus another 14 under Lexus.
Each of those models then branches into multiple trim levels, engine options, drivetrain configurations, and colour combinations. In some markets, a single nameplate like the Corolla exists as a sedan, hatchback, fastback, touring wagon, GR Sport, and GR variant, across petrol, hybrid, and plug-in hybrid powertrains. That is six body-powertrain configurations from one nameplate. Multiplied across dozens of models, the number of individual production specifications runs into the hundreds.
Each unique specification requires its own engineering validation, regulatory homologation, parts inventory management, and dealer training. A trim level that moves 1,500 units per year globally carries the same administrative and supply chain overhead as one that moves 150,000. The cost per unit is wildly disproportionate.
Toyota's operating profit for FY2025, the year ending March 2025, came in at approximately 4.8 trillion yen. For FY2026, ending March 2026, the company projected operating profit of 3.8 trillion yen, a fall of approximately 21 per cent, driven primarily by US tariff impact of nearly 1 trillion yen, yen appreciation reducing the value of overseas earnings, and rising material costs. Net income for the first nine months of FY2026 fell nearly 25 per cent year on year. In that context, Kon's push to cut development cost through specification rationalisation is not an abstract efficiency exercise. It is a direct response to margin compression.
Kon's predecessor spent 14 years expanding the line-up, introducing the GR performance sub-brand, the BZ battery-electric series, the Land Cruiser 70 revival, and hybrid or plug-in hybrid variants across nearly every nameplate. The strategy produced record revenues. It also produced the cost structure that Kon is now inheriting at exactly the moment when tariffs, currency, and raw material costs are squeezing profitability simultaneously.
Analysts tracking Toyota's portfolio broadly agree that Kon is pointing at trim levels and redundant engine-body combinations rather than whole model names, at least in the near term. The likely targets are low-selling specifications within existing models: a trim grade that exists in one market but not others, a powertrain option carried over for regulatory compliance reasons but bought by almost nobody, or a body style that duplicates another in the range without meaningful volume justification.
The GR performance variants, which generate brand attention far beyond their sales numbers, will almost certainly be protected. Hybrids, Toyota's strongest commercial asset and the technology that drives its pricing power in most markets, will not be cut. The BZ electric series, despite modest sales so far, represents Toyota's regulatory and long-term strategic commitment and is unlikely to be wound back.
The models at real risk are those with strong regional identities but no meaningful global volume, and specifications within existing families where the cost of maintaining them exceeds the margin they generate. Kon has not named anything yet. He has said Toyota will not hit the brakes suddenly. But the direction is set and the financial logic is unambiguous.