Toyota CEO Akio Toyoda is paving the way for a new leadership opportunity to younger generation. The automaker announced Thursday that Toyoda will step down and be replaced by Koji Sato, head of luxury subsidiary Lexus.
The withdrawal comes amid an accelerating industry shift to electric vehicles, which the world’s best-selling carmaker, Toyota, has been slow to embrace.
“Toyota is not responding well to market calls for leadership in electric vehicles,” Satoru Aoyama, senior director at Fitch Ratings, told the Financial Times in October, warning that the company could “lose investor confidence.”
Toyoda, the 66-year-old grandson of the company’s founder, described his limitations when he spoke to reporters on Thursday.
“Because of my strong passion for cars, I’m an old-fashioned person when it comes to digitalization, electric cars, and grid cars.” “I can’t go past the driver, and that’s my limit,” he said, according to the FT. “The new team can do what I can’t…” “I have to step back now so that youngsters can come in and write a new chapter of what future mobility should be.”
The move comes as Tesla and its Chinese rivals lower electric car prices, using their advances in electric car production to pressure other automakers.
However, many industry analysts in Japan expressed surprise at Toyota’s divestment, as reported by Reuters.
“It’s a big decision that no one but Akio Toyoda could make,” Tsutomu Yamada, a market analyst at online brokerage AU Kabucom Securities, told the news outlet.
Toyota’s highest price and status in Japan can do It’s easier for him to be honest about his shortcomings. According to the FT, he will become chairman of the carmaker on April 1 and is widely believed to be the next chairman of the powerful Keidanren (Japan Trade Federation).
Yamada said he believed the handover to Sato could “accelerate Toyota’s generational change” and lead the industrial giant to “faster decision-making, which has suffered from delays in decision-making, such as the timing of electric cars.”
Toyoda’s statements last year may have reinforced the perception that it is moving too slowly on electric vehicles. In October, he described Toyota as a “department store for all kinds of powertrains” and insisted it would continue to offer traditional fossil fuel models.
“That’s our strategy, and we’re sticking to it,” Toyoda said. The automakers, including General Motors, have committed to transitioning to all-electric vehicles by 2035.
Toyoda also questions the automakers’ ability to meet California mandates that require electric cars to make up a significant portion of sales by 2030 and ban sales of new gasoline-engine vehicles five years later. According to him, the introduction of electric cars would be hindered by the lack of sufficient infrastructure.
Toyota CEO Akio Toyoda steps down, paving the way for the next generation of leaders.