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Toyota Motor has appointed its chief financial officer to take over from Koji Sato as chief executive of the world’s largest carmaker as it navigates global trade disruption and rising competition from China’s electric vehicle champions.
The Japanese group said on Friday that Kenta Kon would take over as president and chief executive from the start of April, with Sato moving to the vice-chair role and a newly established position of chief industry officer.
Toyota said the reshuffle was “intended to accelerate management decision-making in response to changes in the internal and external environment”.
Sato, an engineer and self-described “car guy” who often tested vehicles alongside chair Akio Toyoda, is stepping down as president after only three years in the role, compared with his predecessor Toyoda’s almost 14 years.
His replacement, Kon, has been at the forefront of cutting costs and improving profits at Toyota during a turbulent time for the automotive industry, with a semiconductor supply crunch and US President Donald Trump’s tariffs.
Toyota extended its lead over Volkswagen as the world’s best-selling carmaker with 11.3mn vehicles sold last year, riding the popularity of hybrids globally as the transition to electric vehicles stalled.
However, Kon faces several strategic challenges to keeping Toyota’s lead, as Chinese carmakers rapidly expand their EV sales with strong software capabilities.
When Sato took over in 2023, he vowed to embark on an EV push but made little headway as the company grappled with engine certification scandals. Its efforts to develop in-house software and an autonomous driving platform also faced setbacks.
Although Toyota has gradually increased the number of EV models on offer, it is doubling down on hybrids. Last year, it sold fewer than 200,000 EVs, compared with 4.4mn hybrids.
Japanese media reported this week that the carmaker had notified suppliers it intended to increase production of hybrids by 30 per cent to 6.7mn cars by 2028, including major expansion of production in the US.
Trump’s tariffs have been a major drag on Toyota’s performance. The company expects ¥1.45tn ($9.25bn) of extra costs in the current financial year to drag down operating profit by 20 per cent to ¥3.8tn.
The personnel change is seen as part of a succession plan to pave the way for Daisuke Toyoda, the son of chair Toyoda, who is 69 years old, to take over, according to several people familiar with Toyota’s plan.
Daisuke Toyoda, 37, joined Toyota in 2016 and is senior vice-president of Woven by Toyota, the carmaker’s software and mobility arm.
Toyota said Kon would lead “reforms across the entire company”, including “addressing the value chain as a whole” to strengthen the company’s earnings.
The group is already overhauling its supplier network through a $34bn take-private of its largest subsidiary, Toyota Industries, that has sparked a stand-off with activist fund Elliott Management. Toyota sees the restructuring of its supplier base as necessary to compete against Chinese EV rivals led by BYD.
People close to Toyota said executive vice-president Hiroki Nakajima had also been in the running for the chief executive job, but Kon, who is viewed as an Akio Toyoda loyalist, was the preferred option.
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