Toyota Appoints Profit Management Expert as President After Profit Decline

Japan's largest automaker Toyota announced on Friday a 43% drop in quarterly profit and that Chief Financial Officer Kenta Nakamura will become the new Chief Executive Officer and President.

Kenta Chika, a veteran Toyota employee, will succeed Koji Sato in these two positions in April, with shareholder approval expected in June.

Koji Sato told reporters, "This demonstrates our determination to push for change with all our might." He described the personnel reshuffle as a "gear change."

Koji Sato will continue to serve asToyota Motor(237.19, -4.20, -1.74%)Vice Chairman of the Board

Toyota stated that Kon Kinuta has practical experience in various fields, including autonomous driving, and is considered an expert in improving the company's profitability.

Hit by rising raw material costs and former US President Trump's tariff policies, all Japanese automakers are struggling.

Toyota, which produces Camry sedans and Lexus luxury vehicles, estimates that the negative impact of tariffs reduced its operating profit by 1.45 trillion yen (approximately $9.2 billion) last year.

Toyota Group's profit for the October-December quarter last year was 1.25 trillion yen (approximately $8 billion), down from 2.19 trillion yen in the same period the previous year.

Toyota's profit for the nine months ending December fell 26% year-on-year to 3.03 trillion yen (approximately $19 billion), compared to 4.1 trillion yen in the same period last year; despite a nearly 7% increase in sales, from 35 trillion yen to 38 trillion yen (approximately $242 billion).

Driven by increased sales in Japan, North America, and European markets, global car sales for the nine months rose from approximately 7 million units to 7.3 million units.

Koji Sato, who served as Toyota's president for the past three years, will assume the role of chairman of the Japan Automobile Manufacturers Association (JAMA) starting in January, continuing to play a crucial role in the industry.

He also holds a leadership position in the Japan Business Federation (Keidanren), an organization that oversees the overall affairs of Japanese companies. Koji Sato admitted that these responsibilities are crucial and that industry transformation is imminent, and he believes that resigning as president will allow him to fulfill these responsibilities more effectively.

Kenta Kin, a close associate of Toyota Chairman Akio Toyoda, grandson of the company's founder, stated that Toyota employees are highly responsible but often reluctant to change due to the effort they put into building the existing system, while the company needs to be more flexible and responsive.

Toyota, headquartered in Toyota City in central Japan, maintained its full-year profit forecast of 3.57 trillion yen (approximately $22.8 billion), a 25% year-on-year decline. Toyota's stock rose 2% after the announcement.

Toyota stated in its announcement: "To continuously advance its transformation into a mobility company, Toyota needs to not only strengthen industry collaboration but also expand cross-industry cooperation."