Toyota Motor Corporation has announced a major leadership change, appoint its finance chief, Kenta Kon, as its next Chief Executive Officer (CEO), with effect from April 1
The surprise decision will see current CEO Koji Sato, who has led the company for the past three years, step aside and assume the roles of vice chairman and chief industry officer, a newly created position within the automaker.
Kon, a close ally and former secretary to Chairman Akio Toyoda, will take over the reins of the world’s biggest carmaker by sales. He is known for his strong focus on cost control and is widely regarded as the key architect behind the planned buyout of forklift manufacturer Toyota Industries.
The proposed deal, which would increase the Toyoda family’s control of the group, has faced criticism from minority investors who argue that it lacks transparency and is undervalued.
He served as Toyoda’s secretary from 2009, when Toyoda became CEO, until 2017, when he was appointed head of the accounting division.
Toyoda, the grandson of the company’s founder, led Toyota for nearly 14 years before handing over to Sato.
According to Reuters, the leadership change was announced alongside Toyota’s third-quarter results, with the company raising its full-year operating profit forecast by almost 12%, supported by a weaker yen and cost reductions.
Shares in Toyota rose 2% by the close of trading following the announcement.
Automakers around the world are under pressure as Chinese manufacturers rapidly reshape the industry.
Toyota has performed better than many rivals, partly due to its long-standing focus on gasoline-electric hybrid vehicles.
While some competitors have struggled with the high costs of shifting quickly into electric vehicles, Toyota’s hybrid strategy has helped support strong sales.
The company retained its position as the world’s top-selling automaker last year.
Under the new structure, Kon will concentrate on internal management, while Sato will focus on wider industry challenges.
The changes are aimed at speeding up decision-making as competition intensifies.
James Hong, head of mobility research at Macquarie, said the move reflected Toyota’s growing need to handle complex business decisions beyond product development.
Kon, I think he basically has more experience dealing with the financial issues of the company than Sato-san, who basically came from the product development side,” he said.
Speaking at a press conference, Kon said he was caught off guard when he was first approached about the role.
“Went completely blank”, he said.
Sato added that Toyoda was not involved in the decision.
In addition to his role at Toyota, Kon oversees finances at mobility technology unit Woven by Toyota, experience that could help as the company works to strengthen its software capabilities to match Chinese competitors.
Sato became CEO in April 2023, when Toyota was facing criticism for its slow progress in battery electric vehicles.
During his tenure, the company’s shares delivered a total return of 111%, including dividends, outperforming the benchmark Nikkei index.
However, Toyota has recently lost market share in several regions, including Southeast Asia, where it faces growing competition from rivals such as BYD.
The leadership reshuffle highlights Toyota’s push to strike a balance between financial discipline, technological innovation, and quicker decision-making as competition in the global auto industry continues to intensify.
(Reuters)
