Toyota Motor Corporation has announced that Chief Executive Koji Sato will step down after just three years in the top role, to be replaced by Chief Financial Officer Kenta Kon. Sato will transition to the role of vice chairman and chief industry officer, focusing on broader industry matters, while Kon will concentrate on internal company management.
The unexpected management change coincides with growing scrutiny over Toyota’s planned buyout of its subsidiary, Toyota Industries—a deal criticised by minority investors for lack of transparency and being underpriced.
The announcement was made alongside Toyota’s third-quarter earnings report, in which the automaker raised its full-year profit outlook by nearly 12%, citing a weaker yen and cost-cutting measures. Sato is scheduled to hold a press conference at 3:30 p.m. local time (0630 GMT) on Friday.
The company said the leadership shift is designed to accelerate decision-making amid vast disruption in the automotive industry. “It feels like there is some regime change within Toyota,” said James Hong, head of mobility research at Macquarie. He noted that while Toyota has always prioritized products, future decisions will increasingly involve non-automotive business areas.
Sato, who succeeded Akio Toyoda in April 2023, guided Toyota through a period of debate over battery electric vehicles, with the company’s contrarian focus on gasoline-electric hybrids ultimately bolstering record sales and helping Toyota retain its position as the world’s top seller. During his tenure, Toyota shares rose 111%, outperforming a doubling in the Nikkei benchmark over the same period.
Despite these gains, Toyota has lost some market share to agile Chinese competitors like BYD in regions such as Southeast Asia and faced criticism over corporate governance, most recently concerning the Toyota Industries acquisition.
Kon, widely regarded as the architect of the buyout, brings extensive financial experience to the CEO role, complementing Sato’s product-development background. “Kon basically has more experience dealing with the financial issues of the company than Sato-san,” Hong said, highlighting the strategic focus of the leadership reshuffle.
