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Toyota taps Lexus head Koji Sato as new CEO; Akio Toyoda becomes chairman

TOKYO – Toyota Motor Corp. has tapped Koji Sato, the head of Lexus and the Gazoo Racing unit, to be the Japanese automaker’s next president and CEO, as Akio Toyoda, grandson of the company’s founder, steps up to be the company’s new chairman.

The changes take effect April 1.

As part of the shuffle, current Chairman Takeshi Uchiyamada, known as the father of the Prius for his work in developing the popular hybrid vehicle, will step aside as chairman but retain a seat on the board.

The reorganization answers a long-standing question about succession for Toyoda, who took office in 2009 and presided over a tumultuous period of challenges and expansion, including the 2009 financial crisis, a global recall scandal and the 2011 Japan earthquake.

Under Toyoda’s watch, the company overcame these challenges to achieve record sales and earnings and solidify its title as the world’s largest automaker.

“I believe that over the past 13 years, I have built a solid foundation for passing the baton,” Toyoda said at an online briefing shortly after the announcement. The new management team, Toyoda said, “has a mission to transform Toyota into a mobility company.”

Toyoda, 66, has worked closely with Sato, 53, in the latter’s roles as head of the Lexus premium brand as leader of Gazoo Racing, a favorite of Toyoda.

Toyoda said Sato was tapped, partly because “he loves cars.”

Sato’s challenges

Among Sato’s challenges is navigating an industry under siege by electrification, autonomous driving and connectivity.

Sato takes the helm at a time when Toyota is being criticized for falling behind in the global electric vehicle race. He is commited to breaking the old Toyota mold by developing fun-to-drive cars that are stylish and cool.

Sato must also plot a path toward a carbon neutral future, while balancing the wide customer needs of the automaker and fending off nimble new rivals from Silicon Valley, China and beyond.

Sato will have to reinvent Toyota for a new era while retaining all the corporate culture that has been the secret to the automaker’s success for so long.

Toyoda is the grandson of Kiichiro Toyoda, the founder of the car company, and the son of Shoichiro Toyoda, a past president of the company until 1992. Toyoda’s shift to the supervisory role of chairman hands control of day-to-day operations to a non-family member for the first time in a decade.

Toyoda took over his family’s namesake automaker just as it was slumping to its first operating loss in 70 years amid the depths of the global financial crisis.

He soon faced another trial with the 2010 recall upheaval surrounding claims of unintended acceleration in Toyota vehicles. Then, the 2011 earthquake-tsunami-nuclear meltdown triple punch throttled the entire Japanese industry, throwing Toyota into defense mode.

Toyoda reacted by taking an “intentional pause” on rampant expansion to regroup by nailing down quality and improving product. By pursuing a more sustainable pace, Toyota soon was on the path toward new heights of earnings, sales and accolades.

In recent years, as Toyoda passed his 60th birthday, speculation began to mount about the eventual handover of the helm. When questioned about his succession plans at last summer’s annual shareholder’s meeting, Toyoda demurred from a straight answer but said the next president must have an “unshakable conviction on why Toyota exists.”

Sato has a engineering degree from Japan’s prestigious Waseda University and joined Toyota in 1992. He was appointed chief engineer of Lexus International Co., where his noted works included leading development of the super sexy Lexus LC coupe.

He became president of both Lexus and Gazoo Racing Company. In those roles, he can often be seen hobnobbing with Toyoda trackside at various racing events, some of which Toyoda participates in as a driver of developmental carbon neutral cars.

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