Toyota Motor President Akio Toyoda, right, and successor Koji Sato test-drive a new Lexus electric vehicle. (Photo via Toyota YouTube channel)
Unusually, the change was announced Thursday via a news conference broadcast on the automaker’s Toyota Times YouTube channel, featuring Toyoda, retiring Chairman Takeshi Uchiyamada and incoming President Koji Sato. Questions from reporters were taken, but only online.
In the video, Toyoda – who will step down as president April 1 but replace Uchiyamada as chairman – called himself part of the “old generation” and said he believed he needed to make way for the new.
“A carmaker is all that I am, and I see that as my own limit,” he said.
His successor, Sato, came up through Toyota as an engineer and currently heads the luxury Lexus brand. At 53, Sato is the same age as Toyoda when he became president in 2009.
At that time, the automaker was reeling from the 2008 global financial crisis and a backfiring expansion strategy that had left it in the red. Leveraging his position as a member of the founding family, Toyoda reworked Toyota’s management and product strategies and shifted to a more robust production and sales system with a lower break-even point.
Toyoda steered the automaker through multiple crises – starting with widespread recalls in 2010, which led to Toyoda appearing in a US Congressional hearing, followed by the March 2011 earthquake and tsunami in northern Japan and the coronavirus pandemic.
“It was because of the crises that my time as president had meaning,” Toyoda said.
Toyota now consistently outpaces rival Volkswagen as the world’s top-selling automaker, with around 10 million vehicles sold in 2022 – 30% more than when Toyoda became president. It earned nearly ¥3 trillion (US$23.1 billion at current rates) in operating profit in fiscal 2021, more than any other Japanese company, and its valuation has more than doubled under Toyoda to over ¥30 trillion.
Though the auto industry’s chip shortage has forced the company to cut production forecasts repeatedly, orders have remained brisk.
Meanwhile, Toyota has taken a distinctly different approach to the industry’s recent pivot toward electrification. While other automakers such as Honda Motor and General Motors have focused on electric vehicles, Toyoda has stressed providing “options,” sticking with a “multi-solution approach” that includes hybrids and even hydrogen.
Getting others to understand his strategy has taken time, the president has said. And in that time, rival automakers ramped up their electric efforts. Tesla has enjoyed rapid growth, selling 1.31 million vehicles last year, and Chinese players – led by BYD, a Toyota partner – could come to pose a threat as well. Making a full-fledged push into the field would be a challenge for Toyota.
“Electric vehicles have sold better than we expected,” a Toyota executive said. “We need to think about how to produce them efficiently.”
Over the past few years, Toyoda has promoted managers in their mid-40s to mid-50s to high-level posts with an eye toward positioning a successor. He has said privately that the biggest risk to Toyota’s management would be him staying on as president.
The company’s top leadership is now 10 years younger than it used to be, setting the stage for its next steps, with Sato at the helm.
“The mission of transforming it into a mobility company with a young team rests on his shoulders,” Toyoda said.