Toyota has named finance chief Kenta Kon as its next chief executive, in a surprise move that will see current CEO Koji Sato step down after just three years to focus on broader industry issues.
Kon, a close ally and former secretary of Chairman Akio Toyoda, will take over as CEO on April 1 as the world’s biggest automaker faces intensifying competition from fast-moving Chinese rivals. Sato will become vice chairman and take on the newly created role of chief industry officer.
The leadership change was announced alongside third-quarter results that saw Toyota raise its full-year operating profit outlook by almost 12%, helped by a weaker yen and cost cuts. Toyota shares finished up 2% following the announcement.
Kon served as Toyoda’s secretary from 2009, when Toyoda became CEO, until 2017, when he was appointed head of the accounting division. He is widely seen as the architect of a planned buyout of forklift subsidiary Toyota Industries, a deal that has drawn opposition from minority investors who say it lacks transparency and is significantly underpriced.
Strategic shift amid Chinese competition
Under the reshuffle, Kon will focus on internal company management while Sato concentrates on broader industry issues – changes designed to speed up decision-making as Chinese competitors disrupt the business.
James Hong, head of mobility research at Macquarie, says the change likely reflects Toyota’s growing need to make non-automotive decisions.
“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,” Hong told Reuters.
Kon told a press conference he was surprised when first approached about the job in the middle of last month, saying his mind “went completely blank”. Sato said Toyoda was not involved in the decision.
Toyota has fared better than most automakers globally thanks to its contrarian bet on gasoline-electric hybrids. While peers have been stung by costs from a rapid push into electric vehicles, Toyota’s focus on hybrids has proved prescient, underpinning record sales and helping it retain its crown as the world’s top seller.
During Sato’s tenure, which began in April 2023, Toyota’s shares delivered a total return of 111%, including dividends, outpacing roughly twofold gains in the benchmark Nikkei. However, Toyota has lost market share over that period to Chinese rivals such as BYD in regions including Southeast Asia.
Kon also oversees finances at mobility technology subsidiary Woven by Toyota, experience likely to be useful as the automaker races to close the software gap with Chinese rivals.
The new leadership structure is intended to accelerate management decision-making and establish a framework that will enable Toyota to “fully carry out its mission of contributing to society through industry,” according to the company’s official announcement.
Sato’s new role as chief industry officer comes as he takes on the chairmanship of the Japan Automobile Manufacturers Association and serves as vice chair of Keidanren, Japan’s main business lobby group.
