By Rosemary
Toyota Motor Corp. on Friday reported a steep 43% decline in quarterly profit and announced a major leadership change, naming Chief Financial Officer Kenta Kon as its next chief executive officer and president as the automaker confronts mounting global challenges.
Kon, a long-serving Toyota executive with experience across a wide range of operations, will take over both roles from Koji Sato in April. The company said the leadership transition is expected to receive shareholder approval at its annual meeting in June. Sato will remain with the company as vice chairman.
Speaking to reporters, Sato described the move as a decisive moment for the automaker, saying the personnel changes represent a strategic “gear shift” aimed at accelerating transformation within the company. He said the decision reflected Toyota’s determination to embrace change at a time of rapid industry upheaval.
Toyota said Kon was selected in part because of his hands-on background in areas such as automated driving and his reputation as a strong advocate for improving earnings performance. The company described him as well-versed in both technical innovation and financial discipline, qualities it believes are essential as Toyota adapts to a shifting global automotive landscape.
The leadership announcement came as Toyota disclosed weakening profits amid broader struggles facing Japanese automakers. Rising material costs and the impact of tariffs imposed by U.S. President Donald Trump have weighed heavily on earnings across the sector. Toyota estimated that tariffs alone reduced its operating profit by 1.45 trillion yen, or about $9.2 billion, in the previous fiscal year.
For the October-to-December quarter, Toyota reported group profit of 1.25 trillion yen, roughly $8 billion, down sharply from 2.19 trillion yen a year earlier. Over the first nine months of the fiscal year through December, profit fell 26% to 3.03 trillion yen, or about $19 billion, compared with 4.1 trillion yen in the same period the previous year. Despite the profit decline, sales rose nearly 7% to 38 trillion yen, or approximately $242 billion.
Global vehicle sales during the nine-month period increased to 7.3 million units from about 7 million vehicles a year earlier, driven by stronger demand in Japan, North America and Europe. Toyota, which produces the Camry sedan and Lexus luxury vehicles, said the higher sales volumes helped offset some of the pressure from rising costs and trade barriers.
Sato, who has served as Toyota’s chief for the past three years, will continue to play a prominent role in the industry. He is set to become chairman of the Japan Automobile Manufacturers Association starting in January and also holds a leadership position at Keidanren, the Japan Business Federation. Sato acknowledged that those responsibilities, combined with the urgency of industry-wide transformation, led him to conclude he could contribute more effectively by stepping down as president.
Kon, who is considered close to Toyota chairman Akio Toyoda, the grandson of the company’s founder, said Toyota’s workforce is highly responsible but sometimes hesitant to change. He noted that while employees have worked hard to build the company’s systems, greater agility is now required to compete in a rapidly evolving market.
Toyota, which is headquartered in Toyota City in central Japan, maintained its full-year profit forecast of 3.57 trillion yen, or about $22.8 billion, representing a 25% decline from the previous year. Investors reacted positively to the announcements, with Toyota shares rising about 2% following the release.
In a statement, the company said that continuing its transformation into a broader mobility enterprise will require not only stronger collaboration within the automotive industry but also the expansion of partnerships beyond traditional industry boundaries.
Original article
Comments