By Daniel Leussink
TOKYO, Feb 6 (Reuters) – Toyota Chief Executive Koji Sato will step down after just three years at the helm of the world’s largest automaker, the company said on Friday, to be replaced by chief financial officer Kenta Kon.
The reshuffle, which will see Sato take on the role of vice chairman and chief industry officer, comes as the automaker has faced increasing scrutiny over a planned buyout of subsidiary Toyota Industries, a deal that minority investors have criticised as lacking transparency and greatly underpriced.
The management change was not widely expected. Toyota made the announcement together with the release of its third-quarter earnings, where it boosted its outlook for full-year profit by almost 12%, helped by a weaker yen and cost-cutting efforts.
Sato will hold a press conference at 3:30 p.m. (0630 GMT) on Friday.
In their new roles Kon will focus on internal company management while Sato will focus on the broader industry, the company said in a statement. The change was intended to accelerate decision-making in response to vast disruption sweeping the industry, the automaker said.
“It feels like there is some regime change within Toyota,” said James Hong, head of mobility research at Macquarie. While product has always been the key priority for Toyota, now there will be many more decisions to be made around the non-automotive businesses, he said.
Sato took over the top job from Akio Toyoda, the founder’s grandson, in April 2023, at a time when Toyota was under fierce pressure over its laggard approach to battery EVs.
The automaker’s contrarian bet on gasoline-electric hybrids has proved prescient, and helped underpin years of record sales, including last year when Toyota retained its crown as the world’s top seller.
During Sato’s tenure, Toyota’s shares advanced 111%, including dividends, outperforming a rough doubling in the benchmark Nikkei over the same period.
Yet Toyota also lost some market share during that time to more nimble Chinese rivals such as BYD in regions like Southeast Asia. It has also been dogged by criticism over governance, most recently around the Toyota Industries buyout.
Kon is seen as the “mastermind” behind the buyout, Hong said.
“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.
(Reporting by Daniel Leussink; additional reporting by Maki Shiraki; Writing by David Dolan; Editing by Chang-Ran Kim, Christopher Cushing and Stephen Coates)
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