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The president of Toyota Motor Corp., the largest manufacturer in Japan, will hand over the reins. As the auto industry undergoes a major transformation, it is hoped Toyota will further enhance its competitiveness and lead the Japanese economy.
Toyota has announced that President Akio Toyoda, 66, will assume the position of chairman with representative authority, and Operating Officer Koji Sato, 53, will be promoted to succeed Toyoda, effective April 1. This is the first change of president at Toyota in about 14 years.
The auto industry is undergoing a once-in-a-century transformation, with electric vehicles (EVs) spreading in an effort for decarbonization, as well as the development of next-generation technologies such as cars that are always connected to the internet and autonomous driving technology.
With regard to industry changes in such fields as electrification and digitization, Toyoda said: “I am a bit old-fashioned. It is my limitation that I can’t go beyond being a ‘carmaker.’” He must have thought it appropriate to entrust a new era for Toyota to Sato, a younger man of 53 with an engineering background.
Toyoda became president of the company in June 2009. He was the first person from the founding family to become president in about 14 years.
Just prior to that, the company reported an operating loss for the first time since the period when the company was established, due to poor sales amid the financial turmoil following the collapse of U.S. investment bank Lehman Brothers.
The company was forced to respond to crises such as a large-scale recall in the United States in 2010 and the Great East Japan Earthquake in 2011.
Nevertheless, it has steadily improved its business performance, and its final profit for the business year that ended in March 2022 was the highest in its history. Toyota has recorded the highest number of sales of brand-new vehicles in the world for three straight years from 2020.
On the other hand, Toyota has been implementing a broad development strategy for electrification, including various options such as hybrid vehicles and fuel cell vehicles. As a result, the company has fallen behind U.S. and Chinese manufacturers in the field of EVs.
Lexus, the luxury car brand Sato is currently in charge of, has announced a policy of selling only EVs by 2035. Going forward, the challenge for Toyota as a whole will be to catch up and overtake other companies in the EV field.
If the transition to EVs progresses, many subcontractors, including those related to engine manufacturing, will be hit hard. Toyota is also urged to support structural reform of auto parts manufacturers.
The auto industry is a core industry that supports about 5.5 million jobs, including those in related industries. It remains highly competitive internationally. Toyota has an extremely important role to play in maintaining and strengthening this competitiveness.
There are reportedly opinions that Toyoda, who will assume the chairman’s post, will be active in the Japan Business Federation (Keidanren). In the field of digitization and decarbonization, collaboration between the auto industry and other industries is also becoming more important. Under its new leadership, Toyota is expected to serve as a bridge between the two sides.
