Toyota Names Kenta Kon as New CEO Following 43% Quarterly Profit Decline

Toyota, the leading automotive manufacturer in Japan, recently disclosed a substantial 43% decrease in its quarterly earnings alongside a major leadership transition. Kenta Kon, the current Chief Financial Officer and a long-time veteran of the company, is set to take over as president and chief executive officer this April, succeeding Koji Sato. While Sato will transition into the role of vice chairman, Kon’s appointment—slated for shareholder confirmation in June—is being framed as a strategic "gear shift" designed to accelerate the company’s evolution. Toyota highlighted Kon’s diverse expertise in areas such as autonomous driving and his proven ability to bolster corporate profitability as key reasons for his selection.

The financial downturn reflects broader challenges facing the Japanese automotive sector, which is currently grappling with skyrocketing material expenses and the significant financial burden of tariffs imposed by U.S. President Donald Trump. Toyota reported that these trade barriers alone stripped approximately 1.45 trillion yen ($9.2 billion) from its operating profits over the past year. For the third fiscal quarter, the company’s profit fell to 1.25 trillion yen, a sharp decline from the 2.19 trillion yen earned during the same timeframe the prior year. Over a nine-month period, profits dipped 26% to 3.03 trillion yen, even as total revenue grew by 7%, reaching 38 trillion yen.

Despite these fiscal hurdles, consumer demand remains resilient. Global vehicle sales rose to 7.3 million units during the first nine months of the fiscal year, with notable growth in the Japanese, North American, and European markets. Sato explained that his decision to step down as president was driven by the urgent need for industry transformation and his demanding responsibilities as chairman of the Japan Automobile Manufacturers Association and his role within Keidanren. By relinquishing his daily executive duties, he intends to focus on broader industrial leadership.

Incoming leader Kenta Kon, who maintains a close professional relationship with Chairman Akio Toyoda, noted that while Toyota’s workforce is exceptionally dedicated, there is a lingering resistance to structural change. He emphasized the necessity of becoming more agile to navigate the current era of mobility. Despite the profit slump, Toyota maintained its annual profit forecast of 3.57 trillion yen, a projection that helped drive a 2% increase in the company’s stock price. Moving forward, the automaker intends to deepen collaborations both within and outside the traditional car industry to secure its future as a comprehensive mobility provider.