Toyota wants to cut its line-up, but why?
By Laura Berry
July 3 2026 - 2:00pm
Toyota has too many models? The company's new global boss seems to think so, and he is sharpening his axe in his hunt to save money. Why is this happening? Which models doesn't Toyota need?
Toyota is the world's biggest car manufacturer and has been for the past six years running. In 2025 Toyota sold 11.2 million vehicles across its three brands - Toyota, Lexus and Daihatsu.
That global dominance is replicated in Australia where Toyota has been the biggest selling car brand for 23 consecutive years.
Toyota's Kenta Kon became the new global CEO of the company on June 17, and has hit the ground running as he looks for what could be done better, while he hasn't mentioned any models by name he's made it clear there will be cuts.
In an interview with Automotive News, Kon said he was touring facilities looking for inefficiencies. It's enough to send a chill down even the most hard working employee's spine.
"We've become increasingly able to identify things that don't seem quite right, areas where operations have become somewhat inefficient, or where the amount of work that doesn't directly add value has increased," Kon told Automotive News.
"We're now at the stage where we can really start addressing them - making corrections and implementing improvements.
"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."
Carmakers, as many companies do, often go through a streamlining process where they prune back on activities deemed superfluous in a bid to save money.
This cutting back is already happening. The fully electric Lexus LF ZC was axed before it even went into production, just before Kon succeeded Koji Sato as President and CEO. Before the promotion Kon was Toyota's Chief Financial Officer.
Mr Sato is a "self confessed" car guy - a mechanical engineer by trade and a performance car enthusiast. Mr Kon calls himself a "numbers guy".
According to Toyota's Financial Year 2026 summary, the company sold 2.5 per cent more cars and sales revenue was up by 5.5 per cent, but the operating profit fell by 7.3 per cent.
Add to this the billions lost from the bottom line caused by tariffs imposed by the United States, a massive loss in sales in China (a 31 per cent drop in May this year alone), a conflict in the Middle East putting pressure on fuel prices and the sudden huge popularity in Chinese electric vehicles, and even the biggest car girl or guy can see the need to cut back on spending.
The axing of the LF ZC is interesting and it happened just as Kon was moving into his new office. This was to be an electric successor to the IS sedan, but perhaps being a sedan was the reason it was axed. SUVs being where the money is these days and all that.
In a time when sales are being stolen from right under mainstream brand's noses by affordable, high-tech and good looking vehicles made by Chinese manufacturers, surely EVs aren't the models Toyota should be axing?
But then Toyota's EVs haven't really taken the world by storm. One of the brand's worst selling cars is the C-HR SUV and the electric version, which recently arrived has done nothing to help sales anywhere globally for Toyota.
Toyota's other electric SUVs, such as the bZ4X, haven't been major hits either. Toyota's focus doesn't appear to be EVs for now. Instead, hybrids are bringing in the money for Toyota.
The axing of the LF ZC was also only just one model, but it's a good indication of how Toyota is now in a phase of conservative growth and not willing to take risks.
That's not to say the brand won't make EVs, of course it will, but rather than sedans like the LF ZC they'll be electric SUVs.
Currently Toyota has 23 models in its Australian range. The worst performers are the Yaris, C-HR and GR86, all with less than 1000 sales so far this year.
Which models will Toyota axe next? Most likely the C-HR first. This SUV, while great to drive, isn't selling well here and around the world - even the fully electric version.
What about the bZ4X? That's actually selling well in Australia and globally even if it had a bumpy start with recalls and a battery that didn't offer enough driving range in the first iteration. Toyota has sold 1526 of them this year. That's more than the 1340 combined sales of closely priced Volkswagen ID.4 and its ID.5 coupe twins.
But when you compare that to its Zeekr 7X rival, with 3664 sales for the same period, then you begin to see that EVs are currently really just a side hustle for mainstream brands that make nearly all their income from traditional models.
Does it annoy Toyota that it's not the go-to for EVs when it has been for ICE cars for decades? I'd say it does, a lot. Even if Toyota would tell you it doesn't and say that it's all about having models for every body - the multipathway powertrain approach is the marketing phrase it uses.
Toyota may even feel that it exerts such a colossal influence over people's purchasing habits that customers will continue to buy what the brand's range offers. The company may just think that "until we make and sell it, people won't buy it".
Yes, it'll lose a relatively tiny amount of sales to BYD, Zeekr and other Chinese rivals but it'll stay its course and bring in electric versions of its successful models.
In the meantime, for Toyota you can probably forget design studies like the LF ZC or wild reborn models such as the Celica or MR2. The Toyota 86 as we know it is also on borrowed time.
Yep, if you thought Toyota was boring now… you ain't seen nothing yet.
