Tokyo: Toyota Motor Corp reported a sharp 43% fall in quarterly profit, citing tariff-related pressures and rising costs, as the company announced a leadership change that will see its chief financial officer take over as chief executive.
Japan’s largest automaker said group profit for the October–December quarter fell to 1.25 trillion yen (€6.8 billion), down from 2.19 trillion yen a year earlier. At the same time, the company confirmed that Chief Financial Officer Kenta Kon will assume the roles of president and chief executive in April, replacing Koji Sato.
Shareholder approval for the leadership transition is expected at the company’s general meeting in June. Sato will remain vice chairman of Toyota Motor Corp.
“This expresses our determination to move towards change with all our might,” Sato told reporters, describing the personnel changes as a strategic “gear shift” for the company.
Toyota said Kon was selected for his experience across multiple areas of the business, including automated driving, and for his role in strengthening earnings performance. Kon is considered a close associate of Toyota chairman Akio Toyoda, the grandson of the company’s founder.
Tariffs and Cost Pressures
Toyota, like other Japanese automakers, has faced mounting challenges from higher material costs and the impact of US tariffs. The company estimated that tariffs alone reduced operating profit by 1.45 trillion yen (€7.8 billion) in the previous fiscal year.
For the nine months through December, Toyota reported a 26% decline in profit to 3.03 trillion yen (€16.1 billion), down from 4.1 trillion yen a year earlier. During the same period, revenue rose nearly 7% to 38 trillion yen (€205.3 billion).
Global vehicle sales for the nine months increased to 7.3 million units, up from about 7 million vehicles, driven by stronger demand in Japan, North America, and Europe.
Outlook and Industry Roles
Toyota maintained its full-year forecast for a profit of 3.57 trillion yen (€19.3 billion), representing a 25% year-on-year decline. Shares in Toyota rose about 2% following the earnings report and leadership announcement.
Sato, who has served as Toyota’s chief executive for the past three years, will continue to play a prominent industry role as chairman of the Japan Automobile Manufacturers Association from January. He also holds a senior position at Keidanren, Japan’s main business federation.
Kon said Toyota employees were highly responsible but often cautious about change, noting the need for greater flexibility as the company pushes ahead with its transformation beyond traditional car manufacturing.
“For Toyota to continue advancing its transformation into a mobility company, it is necessary not only to strengthen industry collaboration but also to expand partnerships beyond the industry,” the company said in a statement.
