'A Huge Surprise': Akio Toyoda, President and CEO of Toyota, Steps Down Toyota is the world's largest automaker, and it's going through a leadership shift.

By Gabrielle Bienasz

Opinions expressed by Entrepreneur contributors are their own.

Courtesy company
Akio Toyoda, Koji Sato, and Takeshi Uchiyamada.

Toyota, the world's largest maker of cars, is embarking on a leadership change.

Akio Toyoda, the grandson of Toyota's founder, is stepping down as president and CEO of the company, a position he has held since 2009. (The company was once called Toyoda, but the spelling was changed to make it more fortuitous.)

"I believe that, over these 13 years, I have built a solid foundation for passing the baton forward," he said in a press conference Thursday, per a company transcript.

Toyoda said the change occurred because the current chairman of the company's board, Takeshi Uchiyamada, resigned. He will stay on the board, but Toyoda will be the new chairman.

Toyoda also noted that the top job was not easy: "In retrospect, these 13 years have been a period of struggling to survive one day after the next. That is my honest feeling."

Koji Sato, who previously held titles including president of Lexus International (Lexus is owned by Toyota), will become the new president and CEO.

Toyota was founded in 1926 by Sakichi Toyoda. In 2021, the company sold 10.5 million cars (including affiliates). This was the most out of any automaker in the world, per CNBC.

One oft-cited reason for the company's success is its Toyota Production System (TPS), which evolved as a way to eliminate waste in the production process. It started with two concepts, "jidoka" which means "automation with a human touch" — in practice this means the company stops a production process as soon as an error is detected. The second concept is the "Just-in-Time concept, in which each process produces only what is needed for the next process in a continuous flow," the company writes.

Philosophically, TPS centers on employee engagement and customer satisfaction, and it has since been adopted (in some form) by rival car manufacturers and even places like hospitals, per a 2008 study from Harvard Business Review. The method helped the St. Bernard Project rebuild homes after Hurricane Katrina in 2005 in half the time, per Forbes.

Toyoda took over as CEO in 2009 when the company was in veritable crisis, per The Associated Press. It lost some $4.6 billion yen that year, amid the larger financial crisis, and it was Toyoda's job to put the company back on track. The year prior, in 2008, the company had its first operating loss in 70 years.

Amid the pandemic and continued supply chain issues, there have still been some struggles. The company reported a 20% expected decline in operating profit in May.

Toyota has also had a slower push into electric vehicles — despite being an innovator with its hybrid Prius in 1997, per CNBC.

Toyoda's move appeared to take many by surprise, per Reuters.

"I myself was surprised. Ten out of 10 analysts had probably been thinking that Toyoda would carry on for a while, so that came as a huge surprise," said Koji Endo, senior analyst at SBI Securities said, per the outlet.

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Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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