Toyota surprises with sudden CEO change amid industry turmoil

Toyota Motor Corp., the world’s largest carmaker by sales, surprised analysts and the automotive industry by announcing a change in its CEO amidst the ongoing volatility in the global automotive sector.

The company stated on Friday that Koji Sato would step down after three years as CEO, a relatively short tenure by Toyota’s standards. The change will take effect on April 1, with Kenta Kon, the company’s Chief Financial Officer (CFO), appointed as the new CEO. Kon is a close ally and former secretary to Akio Toyoda, the Chairman of Toyota.

This decision comes at a time when global automakers are facing multiple challenges, including fierce competition from Chinese carmakers, the expensive shift to electric vehicles (EVs), and trade uncertainties due to US import tariffs.

Many analysts were surprised by the leadership change, as under Sato’s leadership, Toyota had effectively navigated these pressures. David Whiston, an automotive industry analyst at Morningstar, remarked that a CEO change after just three years is unusual for Toyota, especially during a period of continuous success.

Following the leadership transition, Sato will move into a newly created role as Vice Chairman and Chief Industry Officer, while Akio Toyoda, who served as CEO from 2009 to 2023, will remain influential in guiding the company’s strategic direction.

Whiston noted that Toyota’s success largely stemmed from its energy strategy focused on hybrid vehicles, which have dominated the global market, rather than rushing into full electric vehicles like many of its competitors. This approach has gained more acceptance, particularly as EV sales in some markets, especially in the US, have not grown as expected, forcing some manufacturers to scale back their EV plans.

The appointment of Kon, a financial expert, is also seen as a signal that Toyota is placing more emphasis on its financial standing, given the pressures from import tariffs and increasing Chinese vehicle exports to key markets. Jeffrey Liker, a professor emeritus at the University of Michigan and author of books on Toyota, noted that the company has high standards for both product quality and financial targets.

Although Toyota remains the most profitable carmaker in the world, it expects the US tariffs, introduced under former President Donald Trump, to add about $9 billion in costs for the fiscal year ending March 31, 2026. However, Toyota recently raised its full-year operating profit forecast by nearly 12% to ¥3.8 trillion, thanks to a weaker yen and effective cost controls, which led to a 3% increase in its stock price in US trading.

Kenta Kon, who has been with Toyota in accounting and finance roles, including as CFO since July 2025, also has experience outside of car manufacturing. He serves as a director of Woven by Toyota, the company’s software division, and Toyota Fudosan, its real estate business.

At a press conference, Kon stated that while he shares a passion for cars, his main role as CEO would be to oversee the financial health of the company, ensuring that Toyota remains capable of investing, designing, producing, and developing vehicles sustainably in the long term.