Toyota reports a 43% profit plunge and appoints finance chief Kenta Kon as CEO. Learn how the auto giant plans to rebound – read more now.
Japanese automotive leader Toyota Motor Corp announced a major leadership shift on February 6, naming longtime finance chief Kenta Kon as its new chief executive officer and chairman of the board. The move comes as the company disclosed a sharp contraction in earnings, with quarterly profit down roughly 43% and annual profit falling 26% year‑on‑year.
Why the Change?
Kon, a veteran of Toyota’s internal operations and a close associate of Chairman Akio Toyoda, has been tasked with steering the automaker back to stronger margins. His background spans finance, cost‑control, and emerging technologies such as autonomous driving, positioning him as a “profit‑solution” expert in the boardroom.
Financial Snapshot
- Q4 2025 profit: ¥1.25 trillion (US$8 bn), down from ¥2.19 trillion a year earlier.
- Full‑year 2025 profit: ¥3.03 trillion (US$19 bn), a 26% decline.
- Revenue: ¥38 trillion (US$242 bn), up nearly 7%.
- Impact of U.S. tariffs: Estimated ¥1.45 trillion (US$9.2 bn) reduction in operating profit.
Broader Industry Challenges
All Japanese car manufacturers are wrestling with rising commodity costs and trade tensions, especially the tariffs imposed by the United States under former President Donald Trump. Toyota estimates that these duties have shaved more than ¥1.4 trillion off its bottom line.
Sales Momentum
Despite profit pressures, Toyota’s global vehicle deliveries rose to 7.3 million units in the first nine months of 2025, driven by stronger demand in Japan, North America, and Europe.
Leadership Transition Details
Outgoing CEO Koji Sato, who led the company for three years, will step down from the top post but retain the role of vice‑chairman. He will also continue as chairman of the Japan Automobile Manufacturers Association (JAMA) and hold a senior position at Keidanren, Japan’s leading business federation.
What’s Next for Toyota?
Toyota’s executives emphasized that Sato’s departure is not a reaction to the latest results; rather, the board believes fresh leadership is essential to navigate “external headwinds” and accelerate the shift toward flexible, profit‑driving operations. Kon warned that while responsibility is shared across the company, a more agile mindset is needed to revise entrenched systems.
Following the announcement, Toyota’s shares on the Tokyo Stock Exchange jumped about 2% on February 6, reflecting investor optimism about the strategic reset.
Key Takeaways
- Kenta Kon, former CFO, becomes Toyota’s CEO and board chairman.
- Quarterly profit slumped 43%; annual profit down 26%.
- U.S. tariffs cost the automaker an estimated $9.2 bn.
- Revenue grew 7% and global sales topped 7 million units.
- Koji Sato remains influential as vice‑chairman and industry association leader.
Toyota’s next chapter will hinge on how quickly the new leadership can adapt to a volatile trade environment while sustaining the brand’s reputation for quality and innovation.