Toyota CEO pledges stronger earnings amid US tariffs and Middle East turmoil

Toyota Motor Corp. announced that its new chief executive, Kenta Kon, will focus on enhancing the company's "earning power" as it confronts a tougher operating environment. Kon, a former CFO, noted that the automaker's break-even sales level is still somewhat elevated and that the operating profit margin is projected to fall to 6.3% for the fiscal year through March 2027, down from 7.4% the prior year and well below the 11.9% recorded in the year ended March 2024.

The decline is linked to increased U.S. tariffs on cars and components and a surge in oil product prices triggered by the U.S.-Israel war on Iran, which offset gains from a weaker yen. To improve efficiency, Toyota intends to reduce the number of part types, deploy more artificial-intelligence tools and robots on the shop floor, and leverage human skills that cannot be automated. Kon also highlighted the company's broader transformation into a mobility provider, with continued investment in autonomous-driving technology and the development of flying-car concepts.