Toyota Motor Corporation has announced that its Chief Executive Officer, Koji Sato, will step down after just three years in the role.
The company said Sato will be replaced by its Chief Financial Officer, Kenta Kon. Sato is expected to remain within Toyota’s leadership as vice chairman and chief industry officer.
The shake-up comes at a time when Toyota is facing increased scrutiny over its proposed buyout of its forklift subsidiary, Toyota Industries. Minority investors have criticised the deal, describing it as lacking transparency and allegedly undervalued.
Toyota made the announcement alongside its third-quarter earnings report, which showed the company raising its full-year profit forecast by nearly 12 per cent. The improvement was linked to a weaker yen and ongoing cost-cutting efforts.
In the new leadership arrangement, Kon will focus on internal company management, while Sato will shift attention toward wider industry initiatives.
Analysts believe the decision is aimed at speeding up Toyota’s decision-making process as Chinese automakers continue to disrupt the global car market with rapid innovation.
Mobility research analyst James Hong of Macquarie noted that Kon has deeper financial experience than Sato, who rose through product development. Hong also described Kon as a key figure behind the Toyota Industries buyout plan.
Kon, who also oversees finances at Toyota’s mobility technology unit, Woven by Toyota, said he was surprised when he was first approached about the CEO role in mid-January.
Sato became Toyota’s CEO in April 2023, replacing Akio Toyoda, the grandson of the company’s founder. His appointment came during growing pressure for Toyota to accelerate its shift toward battery electric vehicles.
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However, Toyota’s continued focus on hybrid vehicles proved successful, helping the company maintain strong sales and remain the world’s top-selling automaker.
Since Sato took over, Toyota shares have risen by over 111 per cent including dividends, outperforming Japan’s Nikkei index.
Despite its success, Toyota has lost some market share in parts of Southeast Asia to fast-growing Chinese rivals such as BYD. Governance concerns, especially around the Toyota Industries buyout, have also followed the company in recent months.
The leadership change is seen as Toyota’s move to strengthen financial and strategic oversight as competition intensifies and the company expands deeper into mobility and non-automotive businesses.
