Toyota Wants To Tighten The Belt

Happy Wednesday! It's June 17, 2026, and this is The Morning Shift — your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, we're looking at Toyota's goals of world domination, as well as GM's flagging truck sales. We'll also look at Chinese internal combustion discounts, and BMW's pessimistic outlook. 

Toyota recently lost its crown as the most valuable Japanese company, a title it's looking to reclaim under new CEO Kenta Kon. To do that, though, Kon is looking down the barrel of a classic playbook: Cutting costs. From Automotive News: 

Toyota's new CEO, Kenta Kon, joined the board June 17 pledging a war on waste and inefficiency as the world's top carmaker loses its luster as Japan's biggest company.

Shareholders approved Kon's nomination at their annual meeting at Toyota Motor Corp.'s global headquarters here, two months after Kon took the helm on April 1, succeeding Koji Sato.

Earlier this month, technology and telecom giant SoftBank Group Corp. dethroned Toyota as the country's most valuable company by market capitalization, ending Toyota's 22-year run at the top. Flash memory maker Kioxia Holdings Corp. later overtook Softbank and Toyota.

Kon, previously CFO, sets sail with Toyota buffeted by $17 billion in tariff burdens and the threat of new Chinese competitors on the global stage. His company is bracing for 20 percent drop in operating profit this fiscal year, for a third-straight year of sliding earnings.

Cost-cutting is a double-edged sword. On the one hand, plenty of companies have genuine waste that can be lopped off without affecting the end product. On the other, cutting costs in places buyers notice — interior material quality, things like that — very quickly devalues your product. People don't like to spend tens of thousands of dollars on something that "feels cheap," and suddenly you find yourself competing on cost rather than quality. A race to the bottom is tough to win. 

General Motors sells a lot of big trucks, which makes our current oil prices a bit of a problem. In fact, customers have been pivoting away from gas cars far faster than even GM expected — and big truck sales are suffering. From Automotive News: 

High fuel prices spurred by the war in Iran have pushed customers across the industry away from expensive pickups and SUVs faster than General Motors executives expected.

"I'm not going to sit here and say it's permanent yet," GM North America President Duncan Aldred said at a Center for Automotive Research conference in Ypsilanti, west of Detroit. "But we are seeing somewhat of a shrinking of pickup trucks, full-size utilities and some of the heavier [vehicles] and an increase in the more affordable segments of the industry."

Several weeks into the latest Middle East conflict, CFO Paul Jacobson told investors that it usually takes around six months of sustained high prices for people to start considering cheaper, more fuel-efficient options.

This time is different, Aldred said June 16.

"Historically, there's normally at least a six-month lag between gas prices spiking like they have and then a real shift in segmentation," he said. "But if I'm honest, what we've seen over the last 12 weeks or so is there has been a shift."

It's possible that the difference this time is the sheer glut of great electric and hybrid vehicles on the market. Back in the aughts, ditching your gas guzzler meant getting into some economy-minded penalty box. Now, you can get a Hyundai Ioniq 5.

If Americans are starting to shy away from internal combustion, though, China is way ahead of us. The country is so all-in on EVs that gas cars are selling for heavy discounts just to move units. From Bloomberg: 

Prices for new and used gasoline cars in China have slumped after the Iran oil shock cooled demand, further worsening the challenges facing legacy automakers and dealers in the world's biggest auto market.

A new locally-made Range Rover Evoque L sport utility vehicle was going for as low as 179,800 yuan ($26,580) this month, almost 60% less than the recommended retail price of 429,800 yuan, according to a report by Chinese media outlet Jiemian. The average discount for gasoline cars nearly doubled to 33,000 yuan in the first five months of this year, compared with 17,000 yuan a year earlier, according to analysis by the China Passenger Car Association.

The discount rate for new gas-guzzlers averaged more than 25% in the three months ended May, more than twice that of plug-in hybrids or electric vehicles, research data from China Automobile Dealership Association advisor Li Yanwei showed.

You simply love to see it. 

Speaking of China, the nation is becoming increasingly difficult for foreign automakers as Chinese buyer preferences shift towards domestic cars. This has been problematic for BMW, which just lowered its profit estimates based on tough China business (and, of course, the war on Iran). From Reuters: 

BMW slashed ​its outlook for 2026 on Tuesday, blaming an accelerated downturn in the key ‌Chinese market as well as the impact of the Iran war, which the German premium carmaker said had hit consumer sentiment and raised energy costs.

The comments showed how exposed Europe's auto sector — already ​pummelled by fierce Asian competition and weak demand at home — is ​to developments abroad.

BMW said it now expects an operating margin in its core ⁠automotive segment of between 1% to 3%, down from 4% to 6% previously, as well as ​a slight decrease in core deliveries in 2026, having previously expected them to ​be on par.

I, for one, am glad I don't run an international manufacturing corporation right now. Globalized supply chains don't seem easy to manage in 2026. 

It's been nice to see people arriving for the World Cup and actually liking the people of the United States. Germans getting adopted for bar crawls; Brits learning the beauty of dipping fries in a Frosty. It's heartening to see that, despite everything, the melting pot still melts. 

Looks like everyone's expecting this Iran deal to pan out. Here's hoping. 

I don't know why I've been in such an Insane Clown Posse mood for the past couple days, but it doesn't seem to be going anywhere.