Toyota names former secretary of chairman Toyoda as next CEO

By Daniel Leussink and Maki Shiraki

TOKYO, Feb 6 (Reuters) – Toyota on Friday named finance chief Kenta Kon, a close ally and former secretary of Chairman Akio Toyoda, as its next chief executive to steer the world’s biggest automaker as competition from fast-moving Chinese rivals intensifies.

The surprise move will see CEO Koji Sato step down on April 1 after just three years at the helm to become vice chairman and take on the newly created role of chief industry officer. 

Kon, known for keeping a tight lid on costs, is widely seen as the architect of a planned buyout of forklift subsidiary Toyota Industries. The deal, which would tighten the Toyoda family’s grip on the group, has drawn opposition from minority investors who say it lacks transparency and is significantly underpriced.

Kon served as Toyoda’s secretary from 2009, when Toyoda became CEO, until 2017, when Kon was appointed head of the accounting division. Toyoda, the founder’s grandson, led Toyota for almost 14 years before naming Sato as his successor.

The leadership change was announced alongside third-quarter results, with Toyota raising its full-year operating profit outlook by almost 12%, helped by a weaker yen and cost cuts.

Toyota shares turned positive following the announcement and results, and finished the day up 2%.

Automakers globally are scrambling to respond as Chinese rivals upend the market. Toyota has fared better than most, thanks to its contrarian bet on gasoline-electric hybrids. 

While peers have been stung by costs from a rapid push into EVs – Stellantis on Friday announced a $26.5 billion writedown – Toyota’s focus on hybrids has proved prescient, underpinning record sales, including last year when it kept its crown as the world’s top seller.

TAPPING FINANCIAL EXPERTISE

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 with unsettling speed.

James Hong, head of mobility research at Macquarie, said that while product has always been Toyota’s top priority, the change likely reflected its 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,” he said.

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”. Toyoda was not involved in the decision, Sato said.

Kon also oversees finances at mobility technology subsidiary Woven by Toyota, a background likely to be useful as the automaker races to close the software gap with Chinese rivals.

Sato took over from Toyoda in April 2023 at a time when the automaker faced fierce criticism over its slow approach to battery EVs. During Sato’s tenure, Toyota’s shares delivered a total return of 111%, including dividends, outpacing a roughly twofold gain in the benchmark Nikkei.

Even so, Toyota has lost market share over that period to Chinese rivals such as BYD in regions including Southeast Asia.

(Reporting by Daniel Leussink; additional reporting by Maki Shiraki; Writing by David Dolan; Editing by Stephen Coates, Edwina Gibbs and Mark Potter)