Toyota CEO warns of ‘survival battle’ as Chinese EV rivals intensify pressure despite record sales

• ET Online

• Published On Apr 1, 2026 at 03:55 PM IST

Sato acknowledged that production delays and quality-related stoppages have led to longer waiting periods for customers.

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Toyota Motor Corporation, which has been the world’s largest carmaker for six consecutive years, is facing an uncertain future, with outgoing chief executive Koji Sato warning that rapid technological disruption and intensifying competition, particularly from China, pose a serious threat to its survival. Speaking at a major supplier convention, Sato said the global auto industry is entering a critical phase where traditional advantages such as scale may no longer guarantee long-term success.

China’s ev and tech ecosystem intensifies pressure

Sato highlighted the speed at which Chinese automakers are advancing in electric vehicles (EVs), software integration, and cost-efficient manufacturing. These companies are launching feature-rich EVs faster and at lower costs, setting new benchmarks for the industry. “Unless things change, we will not survive. I want everyone to acknowledge this sense of crisis,” Sato said. He added that the industry is now “battling for survival,” with software-defined vehicles, battery innovation, and faster development cycles becoming key differentiators.

Push for efficiency across supplier network

In response, Toyota is focusing on improving productivity across its supplier ecosystem. Sato acknowledged that production delays and quality-related stoppages have led to longer waiting periods for customers. The company is now re-evaluating some of its traditionally strict quality standards, including allowing minor cosmetic imperfections in non-visible parts to reduce waste, cut costs, and improve production speed-while maintaining core reliability.

Record sales but rising uncertainty

Despite recording global sales of over 11 million vehicles last year, Toyota does not consider its position secure. The rise of Chinese EV players, increasing software costs, and evolving markdynamics are adding pressure on legacy automakers. Incoming CEO Kenta Kon has also stressed the need to rebuild competitiveness and strengthen the company’s foundations to navigate the changing landscape.