TOKYO, Jan 26 (Reuters) – Toyota’s chief executive will step down as head of the company founded by his grandfather, the automaker said on Thursday, handing over to the leader of its luxury brand Lexus as the Japanese giant is struggling to cope with the switch to electric. Vehicles.
Brand manager and president of Toyota Motor Corp’s (7203.T) Lexus brand Koji Sato, 53, will take over from April 1, when Akio Toyoda will become president, it said. he declares.
The question of who would take the helm of Toyota – Japan’s biggest company and one of the most influential manufacturers in the world – is a growing concern for investors. But the timing of the announcement was a surprise.
Under Toyoda, 66, who led the company for more than a decade, the automaker has appeared reluctant to embrace electric vehicles, arguing that the hybrid technology it pioneered with its once market-leading Prius, suited many drivers better.
He also touted hydrogen cars as the future, raising fears he could be left behind by the rise of electric vehicles as the flashier and more nimble Tesla Inc
This emphasis on hybrids and hydrogen has also drawn criticism from investors and environmental activists who once widely praised Toyota’s technology and emissions.
“There is no doubt that Mr. Toyoda has been a capable CEO, but the whole automotive industry needs to make disruptive changes and Toyota has fallen behind in our view, so this could be a chance for a fresh start,” said Anders Schelde, chief investment officer. leader of the Danish pension fund AkademikerPension, which has repeatedly urged Toyota to accelerate its transition to electric vehicles.
“We hope this might help Toyota take a new direction, but that remains to be seen.”
The succession announcement was webcast via the automaker’s Toyota Times channel in what looked more like a stilted talk show with a host than an official company announcement.
“The timing of this came as a surprise,” said Seiji Sugiura, an analyst at Tokai Tokyo Research Institute, who noted that there may have been a “sense of stagnation” within the company given the recent pressure on the share price.
“Probably the day-to-day management will not change. Akio Toyoda leaving the CEO position could increase his symbolism within the company and it could be difficult for the young and new chairman to really show his hand. .”
There was also little mention of any concrete business strategy or upcoming investment priorities. Toyoda said Sato’s mission would be to turn Toyota into a “mobility company”, without specifying what that would entail.
“The CEO needs youth, energy, strength,” Toyoda said, saying he himself is now a “relic” of an older generation. In Sato too, he said, he had chosen another car enthusiast.
‘TOUCH STICK’
Toyoda described the transfer as a “touch of the stick” in leadership, but the staged event highlighted his continued pivotal role. He turned from time to time to offer instructions and reminders to Sato.
Sato said Toyoda offered him the CEO job at the end of the year when they were both in Thailand for an event celebrating the 60th anniversary of Toyota’s operations in that country.
“I didn’t know how to respond,” Sato recalled. “I thought it was a joke.”
A Toyota executive, who asked not to be identified, said the automaker was heading for a period of “cloistered rule”, referring to the period in Japanese history when a retired emperor continued to make the decisions.
In its more than a decade at the top, Toyoda has chaired the automaker through a period of intense industry change and growing uncertainty about how traditional automakers can meet the challenge of new challengers such than Tesla.
Toyoda, speaking at a press conference, said his tenure at the helm of Toyota began in 2009 with “crisis after crisis” from the effects of a global recession, Toyota recalls and the crisis of safety from the disruptions that followed the 2011 earthquake and tsunami in northern Japan.
At a shareholders’ meeting in June last year, Toyoda said he was “thinking about timing and selecting a successor” when asked about his future.
On Thursday, he said Sato was chosen because he had “worked hard” to learn Toyota’s philosophy.
Sato began his career at Toyota in 1992, before rising through the ranks to become chief engineer of Lexus International, a luxury automotive brand of Toyota, in 2016, according to his profile on the company’s website.
He has served as President of Lexus International and Gazoo Racing Company, Toyota’s motorsports brand, since 2020. He has also taken on a leadership role at Toyota and became its Chief Brand Officer in January 2021.
Philip Craven, a Toyota executive, said in a videotaped statement that the board had reviewed and approved the succession plan proposed by Toyoda and outgoing chairman Takeshi Uchiyamada.
Reporting by Makiko Yamazaki and Kevin Krolicki; Additional reports by Tokyo office; Written by David Dolan; Editing by Muralikumar Anantharaman and Kim Coghill
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