Toyota announced leadership changes on Friday alongside results showing weaker earnings and a forecast adjustment, as the automaker seeks momentum on its “transformation” plans. The company said it would hand the chief executive and chairman roles to Chief Financial Officer Kenta Kon, while Koji Sato would remain at Toyota as vice chairman and continue major roles beyond the company.
Toyota said the change follows quarterly performance that included a profit decline in the October-December period. The automaker reported group profits of 1.25 trillion yen for that quarter, compared with 2.19 trillion yen in the same three months the prior year, a 43% year-over-year drop.
Kon, Toyota’s finance chief, will succeed Sato in both roles in April, Toyota said. The company added that shareholder approval is expected in June, and that Sato would continue in a senior corporate position, remaining vice chairman at Toyota Motor Corp.
In comments to journalists, Koji Sato described the personnel shift as part of a broader strategic transition, saying, “Esto expresa nuestra determinación de avanzar hacia el cambio con todas nuestras fuerzas,” and qualifying the changes as a “cambio de marcha.”
Toyota also pointed to what it called continuity in purpose rather than a response to problems. Company officials emphasized that Sato was not being replaced due to any issue, noting that Toyota’s most recent financial results showed the automaker was still performing well despite headwinds outside its control, including tariffs.
In addition to the executive succession, Toyota’s announcement placed the leadership change in the context of industry pressures on Japanese automakers. The company said that manufacturers in Japan have been struggling due to increased material costs and the impact of tariffs from U.S. President Donald Trump, and estimated those tariffs erased 1.45 trillion yen (9.2 billion dollars) of its operating profit last year.
Toyota reported that sales rose even as earnings fell, with global vehicle sales for the nine months reaching 7.3 million vehicles from about 7 million. Toyota said vehicle sales increased in Japan, North America and Europe, and it also reported group results for January-December, including a 26% decline in earnings to 3.03 trillion yen, compared with 4.1 trillion yen the prior year.
Akio Toyoda, identified in Toyota’s statement as the company’s president and as the grandson of the founder, also figured in the company’s framing of Kon’s selection. Toyota said it chose Kon because of his hands-on experience across various fields, including automated handling, and characterized him as close to Toyoda. Kon said internal changes were needed as Toyota’s people, in his view, can be reluctant to adjust systems they developed.
Toyota said it raised its forecast for the full fiscal year to 3.57 trillion yen, representing a 25% decrease from the prior year. After the announcements, shares of Toyota listed in Tokyo rose about 2% on Friday.
As part of Sato’s continued leadership in the wider industry, Toyota said he would continue serving as a key figure. Toyota said Sato would remain president of the Japan Automobile Manufacturers Association (JAMA) and hold a leadership role in Keidanren, the Japan Business Federation, describing the responsibilities as urgent enough that he stepped down as Toyota chairman to focus on them. Toyota said it would expand partnerships beyond the auto industry as it pursues its mobility transformation, quoting the company’s statement: “Para que Toyota continúe avanzando en su transformación hacia una empresa de movilidad, es necesario no solo fortalecer la colaboración en la industria, sino también expandir las asociaciones más allá de la industria”.