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Jul 22, 2023

Reactions to Akio Toyoda stepping down as Toyota CEO

Toyota Motor Corporation President Akio Toyoda bows to reporters at a briefing on the company's strategies on battery EVs in Tokyo, Japan December 14, 2021. REUTERS/Kim Kyung-Hoon Acquire Licensing

Toyota Motor Corporation President Akio Toyoda bows to reporters at a briefing on the company's strategies on battery EVs in Tokyo, Japan December 14, 2021. REUTERS/Kim Kyung-Hoon Acquire Licensing Rights

TOKYO, Jan 26 (Reuters) - Toyota Motor Corp (7203.T) said on Thursday that Akio Toyoda will step down as president and chief executive to become chairman from April 1, and hand over the helm of Japan's biggest automaker to its top branding officer, Koji Sato.

Sato will become the new CEO while the current chairman, Takeshi Uchiyamada, will drop his chairman title but remain on the board, Toyota said.

The issue of who would take over from Toyoda, the 66-year-old grandson of the company's founder, had increasingly been a focus for investors.

Here are some reactions to the news:

“I myself was surprised. Ten out of 10 analysts had probably been thinking that Toyoda would carry on (as CEO) for a while, so that came as a huge surprise. I don’t know if now was the best timing for the change.”

“Because Sato is 53 – very young compared to many of the fellow executives – he wouldn’t be able to make any major shifts. But the fact that he succeeded Toyoda at that age suggests Sato may continue leading the company for the next decade, so the next few years would be just a kind of apprenticeship period for Sato as the president.”

SEIJI SUGIURA, SENIOR ANALYST, TOKAI TOKYO RESEARCH INSTITUTE

"The timing of this was a surprise. Given that it happened after the share price broke below 2,000 yen, there may have been a sense of stagnation leading to speculation that the top management would be replaced. Koji Sato is a young person who likes cars, and there's the impression that he was chosen to give a certain impression outside the company.

"Probably the day-to-day management will not change. Having Akio Toyoda step away from being CEO may increase his symbolism within the company and it may be hard for the young, new president to really show his hand.

"Toyota has spent a decade raising its value as a company, and the share price also rose. Continuing with the 'Toyoda Route' will lead to stable management. It's a bit unknown if it can grow another level, this will have to be watched for the future.

"As seen in the case of Nidec, another Japanese manufacturer that has extensive supplier networks and is run by a charismatic founder-chairman ... The selection of the next leader is a crucial factor in these companies’ future course.

"Toyota’s Toyoda was from the founder’s family, so today’s transition was especially symbolic. We must closely watch how Sato will lead the company going forward.”

TSUTOMU YAMADA, MARKET ANALYST, AU KABUCOM SECURITIES

"This was a surprising appointment. He's so young ... my initial reaction was 'how many executives has he skipped?'. This is a big decision that nobody else but only Akio Toyoda could make.

"This appointment could accelerate Toyota's generation change, whether it will be good or bad.

"I don't think Toyota can completely shift its business strategy that soon even under Sato's management so we would need to see the progress for a while. But we might be going to see the company with a faster decision-making process, having suffered from a delayed decision-making such as a launch timing of EVs."

"I was very surprised because President Toyoda has made various remarks from the standpoint of the auto industry, and also about Japanese industry. To have somebody who has such passionate thoughts and has made so many comments suddenly quit makes me wonder what will happen in the future. I'd like him to continue to give us guidance regardless of his position."

"I'm afraid at this point we can only speculate. In my view, the new appointment is less about a change in direction and more about careful consideration of the best possible way to organise the handover, avoiding disruption and chaos. Unlike other head of companies who were founders or related to founders (for example Osamu Suzuki or Shigenobu Nagamori), Akio Toyoda has never put his own person first, but focused very much on what is best for the company. While Mr Toyoda is still young enough to lead a company, certainly by Japanese standards, he must have wanted to share responsibilities with another executive, looking ahead to the next five to 10 years. It's likely that he'll remain active as chairman for a long time and continue to put his mark on Toyota. Given the huge challenges that the industry is facing, the bottom line is probably that Akio Toyoda felt that after 13 long and difficult years, the time for change was right, and a new leader could bring new energy and ideas to Toyota."

MANAGEMENT

“The personnel change underscores a transition to the next stage after a decade of recovery from the global financial crisis, led by the founding Toyoda family.

"Toyota, from the overseas investors’ perspective, has been seen as sluggish in the electrification race because the company has deployed a variety of options, not just electric vehicles but hydrogen and existing gasoline-powered cars. This personnel change can be an opportunity for Toyota to cast off its backward image if they can show a focus on businesses based on the next-generation energy, including electric vehicles."

"The incoming president will face a challenge of maintaining a full lineup of vehicles. He is tasked to aggressively promote zero-emission battery electric vehicles while making sure existing (gasoline engine) models also sell well, which will take considerable human and financial resources and investment."

Reporting by Kantaro Komiya, Mariko Katsumura, Satoshi Sugiyama, Elaine Lies, Tim Kelly; Compiled by Robert Birsel

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