Toyota shares rise: the carmaker changed its head and raised its full-year profit outlook

The world's largest automaker, Japan's Toyota, announced on February 6 that it will change its CEO. The news came along with the publication of Toyota's results for the third quarter of fiscal year 2026, as well as the company raising its year-end forecasts.

The markets took Toyota's reports positively - the carmaker's securities in Tokyo jumped by more than 3% in the moment (at the close of trading they were up by 2%). Toyota's receipts on the premarket in New York also added a little more than 2%.

After three years as Toyota CEO, Koji Sato will step down, the automaker announced. His place will be taken by the company's chief financial officer Kenta Kon, a close associate of Toyota Chairman Akio Toyoda, the grandson of Toyota's founder, who led the company for nearly 15 years before appointing Sato as his successor, Reuters wrote.

Sato will step down on April 1, becoming vice chairman of the company and assuming the newly created position of "industry director" at Toyota.

The appointment of the new CEO coincided with the release of Toyota's quarterly earnings, where the company raised its operating profit forecast for the fiscal year to 3.8 trillion yen ($24.26 billion) - nearly 12% higher than its previous forecast of 3.4 trillion yen - thanks to a weak yen and cost cuts. Toyota's fiscal year ends in March.

As CFO, Kohn is known for strict cost control, Reuters notes. He is also believed to be behind the planned buyout of Toyota's subsidiary Toyota Industries, which makes forklifts, auto parts and textile machinery, the agency points out. The deal, Reuters notes, will strengthen the Toyoda family's control over the Toyota Group. Minority shareholders have previously criticized the deal, calling it opaque and severely undervalued.

Prior to his promotion in the accounting department, Kon headed the company secretariat when Akio Toyoda was CEO.

In his new role, Kon will focus on the company's internal management, while Sato will focus on broader industry issues. Macquarie's James Hong said that while product has always been Toyota's top priority, Kon's appointment reflects the automaker's need to make many decisions on the company's non-automotive businesses. "Kohn, in fact, has more experience with the company's financial issues than Sato, who came from the product side," he said(quoted by Reuters).

Kohn admitted at a press conference that he was surprised by the offer to lead the company in the middle of last month. Sato added that Toyoda was not involved in the decision. Kon is also currently in charge of the finances of Woven by Toyota, a subsidiary that specializes in mobility and AI technologies. And that experience, Reuters points out, is something Kon is likely to benefit from, given that Toyota is trying to close the software gap with rivals in China.

Sato took over as CEO in April 2023 when Toyota was under pressure over its relatively slow transition to battery electric vehicles. The bet on gasoline-powered hybrids has been successful and has supported the company's record sales, including last year, when Toyota remained the global sales leader, Reuters recalls.

During Sato's leadership, Toyota shares rose 111% on a dividend-adjusted basis, surpassing the nearly doubling of the Nikkei index over the same period.

This article was AI-translated and verified by a human editor