Can a carmaker enjoy too much success? Toyota’s CEO says the auto giant’s catalogue is… too big.
Even capturing the global sales crown for a sixth consecutive year cannot shield an automotive giant from the realities of rising operational costs. Toyota sold over 10.5 million vehicles globally in 2025, putting them far ahead of the Volkswagen Group in second place. But the Japanese automaker is also staring at consecutive years of declining financial performance. Profits slid by roughly $5.9 billion USD from 2024 to 2025, with an additional 20 percent drop projected ahead.
Unsustainable bloat
In response, Toyota’s newly appointed CEO, Kenta Kon, is sounding the alarm. After stepping into the role on April 1, the former finance executive has spent his initial months touring research and development facilities. His primary diagnosis? The brand simply has too many models, configurations and specialized variants, and that bloat is stretching its engineering talent thin and driving up manufacturing costs.
Trimming the fat from a complex global portfolio
Said Kon to reporters following Toyota’s 122nd annual shareholder meeting, “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.”
For a Toyota wanting to lose weight, the scope of the challenge is staggering. In the United States alone, the auto giant operates as the last remaining full-line automotive brand. It currently offers 32 distinct models if you count gas and hybrid powertrains separately, plus another 14 under the luxury Lexus banner. Globally, when including subsidiaries Daihatsu and Hino, well over 100 different vehicles roll off Toyota assembly lines.
While Toyota’s executive team has not finalized a list of model cancellations, one head has already rolled. The highly anticipated Lexus LF-ZC electric luxury sedan has been officially shelved, with the company citing a workload mismatch and market demand fluctuations.
Beyond that, there are clear regional redundancies that many industry watchers have been pointing to for a while. In North America, the relevance of retailing the niche Crown sedan alongside the high-volume Camry has been questioned, for example.
Perhaps a bigger problem – and a more promising area to streamline – lies within the product offerings of popular models. Can you guess how many configurations of the full-size Tundra pickup are offered in North America? 37. Which is something for any model, let alone one that doesn’t hold a huge share of its segment.
Maintaining powertrain choice
Steamlining doesn’t mean the company plans to cut into the diversity of powertrains it offers, which has been central to its approach in recent years. Kon made clear the automaker will maintain its multi-pathway approach; production capacity for hybrid models will expand, while gasoline, plug-in hybrid and diesel options will remain intact.
Similar bloat at Volkswagen
Toyota is not alone in its quest to get leaner and meaner. Volkswagen Group is undergoing its own aggressive restructuring – though in contrast with its Japanese rival, it is doing so during a period of intense organizational distress.
The German giant announced a sweeping transformation plan at its annual general meeting. For one thing, it has announced it will aim to cut 50,000 domestic jobs in Germany by 2030. But beyond that, it is making like Toyota in wanting to simplify its product portfolio.
The plan is to aggressively phase out average-performing, low-margin products, like the recently axed Audi A1 and Audi Q2 subcompacts, and focus assets entirely onto core, high-volume models. The brand also aims to standardize its digital and physical foundations, cutting down the total number of electronic architectures and modular platforms to sharply reduce build complexity and accelerate vehicle development timelines.