Toyota boss says major cost-cutting efforts are on the way in new comments as Japanese giant aims to avoid a similar fate to Nissan and VW

Toyota’s recently-appointed CEO has detailed cost-cutting measures Toyota will resort to in order to reduce the break-even point of its model range in a new interview.

Speaking to industry source Automotive News, CEO Kenta Kon explained the company would be targeting items as small as doorhandles and seat designs so new models can pay for themselves sooner.

“Breakeven volume is a very important key performance indicator for us but what we’re seeing now is an upward trend of the breakeven volume. We have to bring it into a downward trend,” he told Automotive News.

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Toyota’s profit margins have been slashed since 2024, and Kon is expected to draw on his experience trimming Toyota’s overheads during the global financial crisis to help the brand recover.

This cumulative improvement is part of Kenta Kon’s wider strategy to lean back on Toyota’s Japanese philosophical manufacturing principles to keep the company sustainable.

Not only will this mean cost reduction through the Kaizen mindset of continuous improvement, but Kon also spends a significant amount of time visiting front-line factory locations (genba) specifically to hear about efficiency roadblocks from staff, according to Toyota’s own in-house publication Toyota Times.  He is also known to send senior office staff like accountants on similar trips so that they can truly understand the inner workings of Toyota.

“People in certain areas already have this awareness of what needs improvement but there might be mechanisms that hinder it. I support them to clear those obstacles,” he told Automotive News.

Nissan and Volkswagen, for example, have been forced to consolidate their manufacturing footprints with widely-publicised factory closures, axing significant numbers of employees, and completely overhauling model ranges. 

They must do so as they face an existential threat from unprecedented levels of new competition from China, increasing trade barriers around the world, and a higher-inflation environment.

It is also working on implementing next-generation manufacturing techniques with its joint-venture partners in China.

Expected to underpin a new Lexus model in the near future, the brand has invested in gigacasting techniques which reduces weight, cost, and complexity in electric vehicles.

It also represents a shift for the brand in developing new manufacturing techniques outside of Japan.

The first vehicle using this technology is expected to debut in 2028.