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NAGOYA – The top executive of Toyota Motor Corp. pledged to enhance its “profitability,” as the industry encounters challenges due to U.S. tariffs and the ongoing conflict in the Middle East.

Toyota’s breakeven volume is “somewhat elevated,” stated Toyota’s CEO and President Kenta Kon during a recent press meeting, further noting, “We aim to change this.”

Kon, who had a lengthy career in accounting and previously held the position of chief financial officer at the company, took over as CEO of the world’s biggest volume automaker in April, succeeding Koji Sato.

Toyota stated last week that it anticipates its operating profit margin will decrease to 6.3 percent for the fiscal year ending March 2027, down from 7.4 percent in the previous year, which marked the second consecutive year of decline. The rate was 11.9 percent for the year concluded in March 2024.

Increased U.S. tariffs on vehicles and their components, along with a rise in oil product costs due to the U.S.-Israel conflict with Iran, put additional strain on profit margins, offsetting the beneficial impact of a weaker yen.

Among cost-reduction strategies, Toyota plans to decrease the number of part types, according to Kon, which is anticipated to enable the company to utilize factory space more effectively and enhance efficiency.

“I am convinced that Toyota generates value and profits at its worksites,” Kon stated.

“There’s ample space for enhancement,” he remarked.

Toyota, famous for its lean manufacturing approach based on the just-in-time concept, will incorporate artificial intelligence and additional robots into its production process, according to Kon.

But humans will have an even more crucial role, he stated, noting that “The value of tasks only people can perform will rise.”

As Toyota seeks to evolve from an automobile manufacturer into a mobility enterprise, Kon mentioned that the company will also concentrate on aerial vehicles and self-driving technologies.

“We aim to build a world that allows more individuals to travel with greater ease,” he stated.