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Toyota Motor has appointed its chief financial officer to take over from Koji Sato as chief executive, as the world’s largest carmaker navigates global trade disruption and rising competition from China’s electric vehicle champions.
The Japanese group said on Friday that Kenta Kon would take over as president and CEO from April, with Sato moving to the vice-chair role and a new position of chief industry officer.
Toyota said the reshuffle was “intended to accelerate management decision-making in response to changes in the internal and external environment”.
Sato, an engineer and self-described “car guy” who often tested vehicles alongside chair Akio Toyoda, is stepping down as president after only three years in the role, compared with his predecessor Toyoda’s almost 14 years.
His replacement, Kon, has been instrumental in cutting costs for Toyota during a turbulent time for the industry, with supply-chain crunches and US President Donald Trump’s tariffs.
Sato told a press conference that Toyota needed tighter cost control so it could afford investments in multiple technologies including battery-powered electric cars and autonomous driving.
“The environment . . . has pushed us towards a gear change to improve productivity and produce ever better, more affordable vehicles,” said Sato. He admitted his three-year tenure was “too short”.
Toyota extended its lead over Volkswagen as the world’s best-selling carmaker with 11.3mn vehicles sold last year, riding the popularity of hybrids globally as the transition to EVs stalled.
However, Kon faces several strategic challenges to keeping Toyota’s lead, as Chinese carmakers expand their EV sales with strong software capabilities and others such as Tesla lead on autonomous driving.
Sato had vowed to embark on an EV push but made little headway as Toyota grappled with engine certification scandals. Its efforts to develop an in-house software platform through its Woven by Toyota subsidiary, where Kon was CFO, have also faced setbacks.
Although Toyota has gradually increased the number of EV models on offer, it is doubling down on hybrids. Last year, it sold fewer than 200,000 EVs, compared with 4.4mn hybrids.
Trump’s tariffs have been a drag on Toyota’s performance, but cost-cutting efforts have mitigated much of the pain.
On Friday, it lifted its net profit forecast for the current financial year by 22 per cent to ¥3.6tn ($22.9bn) due to a weak yen and cost-cutting. But that will still be down a quarter on the previous year because of ¥1.45tn in tariff payments.
Net profit for the third quarter to the end of December fell 43 per cent year on year to ¥1.3bn, the company reported on Friday. Shares closed up 2 per cent.
The personnel change is seen as part of a succession plan to pave the way for Daisuke Toyoda, the son of chair Toyoda, who is 69, to take over, according to several people familiar with Toyota’s plan.
Daisuke Toyoda, 37, joined Toyota in 2016 and is senior vice-president of the carmaker’s software and mobility arm.
Toyota said Kon would lead “reforms across the entire company”, including “addressing the value chain as a whole” to strengthen earnings.
The group is overhauling its supplier network through a $34bn take-private of its largest subsidiary, Toyota Industries. Toyota sees the restructuring of its supplier base as necessary to compete against Chinese EV rivals led by BYD.
