TOYOTA, Japan — In a significant corporate restructuring, Toyota Motor Corporation unveiled a 43% plunge in quarterly profits alongside the appointment of Chief Financial Officer Kenta Kon as its incoming President and CEO. The leadership transition, effective this April, signals the automaker’s strategic response to mounting financial pressures and industry transformation.
Kon, a seasoned Toyota executive with expertise spanning automated driving and financial optimization, will succeed Koji Sato, who retains his position as Vice Chairman. The board’s decision, subject to shareholder ratification in June, represents what Sato characterized as a necessary ‘gear shift’ for the automotive giant.
The financial results revealed stark challenges: October-December quarterly profits plummeted to ¥1.25 trillion ($8 billion) from ¥2.19 trillion year-over-year. Despite a 7% sales increase to ¥38 trillion ($242 billion) for the nine-month period through December, profits declined 26% to ¥3.03 trillion ($19 billion).
Toyota attributed substantial financial headwinds to escalating material costs and U.S. tariff policies, estimating a ¥1.45 trillion ($9.2 billion) operating profit reduction from tariffs alone in the previous year. Nevertheless, global vehicle sales demonstrated resilience, growing to 7.3 million units from 7 million, with gains across Japanese, North American, and European markets.
The company maintained its full-year forecast of ¥3.57 trillion ($22.8 billion) profit, representing a 25% annual decrease. Investor response appeared optimistic, with Toyota shares climbing 2% following the announcements.
Sato, who will continue leading industry initiatives as chairman of JAMA (Japan Automobile Manufacturers Association) and Keidanren (Japan Business Federation), emphasized the urgency of organizational adaptation. Kon echoed this sentiment, noting Toyota’s need for increased agility despite its established systems.
In an official statement, Toyota underscored its commitment to ‘expanding partnerships beyond the industry’ as it accelerates its transformation into a comprehensive mobility company.