Toyota makes seismic leadership change as tariffs eat into profits

Core Insights - American consumers show a strong preference for Japanese cars, with nearly 20% of U.S. auto import spending in 2024 directed towards Japanese manufacturers, second only to Mexico [1][10] - Toyota's recent fiscal results indicate a successful first three quarters, but the company faces challenges that may have led to a leadership change [2][5] Financial Performance - Toyota reported an operating income of nearly $21 billion for the first three quarters of the fiscal year, projecting a full-year operating profit of over $24 billion, which is $3 billion less than the previous year [5] - The company anticipates a $9.23 billion cost due to tariffs in fiscal 2025, with potential for higher costs had recent tariff negotiations not occurred [5][6] Market Position - In the U.S. market, Toyota sold 2.52 million vehicles, reflecting an 8.4% year-over-year increase, capturing a 15.5% market share [6] - The overall automotive market is competitive, with GM leading at 2.83 million vehicles sold (+5.1% YoY) and a 17.3% market share, followed by Ford and Hyundai [6] Leadership Changes - Toyota announced the demotion of CEO Koji Sato, who will be replaced by CFO Kenta Kon effective April 1, with Sato transitioning to a new role as chief industry officer and vice chairman [7][9] - Kenta Kon is recognized for his cost management skills and has a close relationship with Toyota Chairman Akio Toyoda [7][9]