Toyota names close ally of chairman Toyoda as next CEO

TOKYO (Reuters) – Toyota on Friday named finance boss Kenta Kon, a close ally of Chairman Akio Toyoda, as its next chief executive, as the world's largest automaker grapples with deepening competition from fast-moving Chinese rivals.

The surprise move will see current CEO Koji Sato step down from April 1 after just three years at the helm to become vice chairman and take on the newly created role of chief industry officer.

As chief financial officer, Kon is known for his ability to keep a tight lid on costs. He is also widely seen as the architect of a planned buyout of forklift subsidiary Toyota Industries.

The deal, which would strengthen the Toyoda founding family's control of the Toyota group, has been opposed by minority shareholders who have criticised it as lacking transparency and being greatly underpriced.

Before rising through the ranks of the accounting department, Kon spent time as the head of the automaker's secretarial department while Toyoda was CEO.

Toyoda, the grandson of the automaker's founder, was chief executive for almost a decade and a half before he named Sato as his successor.

The announcement was made in tandem with the release of Toyota's third-quarter earnings, where it boosted its outlook for full-year operating profit by almost 12%, helped by a weaker yen and cost-cutting efforts.

TAPPING FINANCIAL EXPERTISE

In their new roles Kon will focus on internal company management while Sato will focus on the broader industry - changes intended to accelerate decision-making at a time when Chinese rivals are disrupting the auto business with alarming speed.

James Hong, head of mobility research at Macquarie, said that while product has always been the top priority for Toyota, the change likely reflected the automaker's awareness of the many more decisions to be made around the non-automotive businesses.

"Kon, I think he basically has more experience dealing with the financial issues of the company than Sato-san, who basically came from the product development side," he said.

Kon told a press conference he was surprised when he was first approached about the job in the middle of last month. Toyoda was not involved in the decision, Sato said.

At present, Kon is also in charge of finances at mobility technology subsidiary, Woven by Toyota, a background that is likely to prove helpful as Toyota tries to close the software gap with Chinese rivals.

Sato took over the top job from Toyoda in April 2023 at a time when the automaker was under fierce pressure over its laggard approach to battery EVs.

The automaker's contrarian bet on gasoline-electric hybrids has proved prescient, and helped underpin years of record sales, including last year when Toyota retained its crown as the world's top seller.

During Sato's tenure, Toyota's shares advanced 111%, including dividends, outperforming a rough doubling in the benchmark Nikkei over the same period.

But Toyota also lost market share during that time to Chinese rivals such as BYD in regions like Southeast Asia.