Mr. Akio Toyoda will step down from the position of CEO to assume the position of Chairman of the company from April 2023. His replacement is Koji Sato – president of the Lexus brand.
Toyota Motor Corp. has appointed Lexus President Koji Sato as Chief Executive Officer, replacing Akio Toyoda as the world’s number one automaker moves toward innovation towards electrification and automation.
Toyoda, the grandson of the Japanese car giant’s founder, will take over as the company’s chairman from April 1. He has been the CEO of Toyota for more than a decade, making Toyota the largest automaker in the world.
“To drive change at Toyota, I decided that it would be best for the company to have a new CEO while I become president,” Toyoda said in an online news conference on January 26.
Mr. Sato, 53, assumes the leadership position of Toyota at a pivotal time. The Japanese automaker is facing a series of criticisms for not wanting to go all-in on electric vehicles, instead “betting” on a variety of technologies including battery electric vehicles, hybrid technology, and more. hydrogen-powered vehicles and vehicles using traditional internal combustion engines.
Sato, a traditionally trained engineer, says that he has devoted himself to making cars, joining Toyota in April 1992 after graduating from Waseda University. In early 2016, he was appointed chief engineer of Lexus and then more than a year later, became the director of luxury car division of Toyota. He was also appointed as Toyota Brand Manager in January 2021.
Sato’s appointment sends a clear message, said Mitsushige Akino, an analyst at Ichiyoshi Asset Management. “The economic and social environment has become more volatile and when he becomes president, Akio Toyoda will likely have a broader view of management,” he said. “Strong management is better for Toyota. By appointing Mr. Sato, the message is that younger people should step up to take on the big responsibility.”
Automakers from Volkswagen AG to Ford Motor are rapidly moving away from cars with internal combustion engines in favor of new, cleaner product lines. Although Toyota plans to spend as much as $31 billion to launch 30 electric vehicles by 2030, Mr. Toyoda has a reputation for going against the future of the industry. He always said that he doubted users were ready to change to electric cars or not. This approach raises concerns for Toyota’s position as the world’s number one automaker. Others see it as a long-term bet.
Toyota has overtaken VW in 2020 to become the world’s best-selling automaker and widens the gap even further in 2021. Before that, VW led the global auto industry for five years, until as sales in Europe fell to their lowest levels in decades.
Toyota is expected to announce full-year 2022 sales later this month.
From left to right: Mr. Akio Toyoda – former CEO of Toyota, Mr. Koji Sato – CEO who is about to take office and Mr. Takeshi Uchiyamada – who will step down from the position of President of Toyota.
The “step back” that Mr. Toyota is taking is not unprecedented in history. At the age of 66, he will move into the role of Chairman roughly equal to the previous CEOs of this manufacturer. Mr. Katsuaki Watanabe stepped down at the age of 67. Before that, Mr. Fujio Cho left his position at the age of 68 and Mr. Hiroshi Okida at the age of 66.
“The leadership shuffle was unexpected, but the decision to hand the torch to a younger leader is commendable,” said Tatsuo Yoshida, a senior analyst at Bloomberg Intelligence.
Mr. Toyoda is the second longest-serving head of a major auto company, according to data compiled by Bloomberg. He took over the company in 2009, shortly after Elon Musk took over his position at Tesla. Since then, shares of Toyota have more than doubled, with a market valuation of $238 billion.
During Toyota’s annual shareholder meeting last June, Mr. Toyoda mentioned the steps the company is taking to find and develop potential successors. Anyone who follows in his footsteps must have an “unshakable belief in why Toyota exists” and a solid understanding of the company’s philosophy, he said. He also affirmed to rejuvenate the company’s leadership.