Toyota Replaces CEO After $9 Billion Hit From Trump’s Tariffs

Kosaku Narioka

February 6, 2026 4 min read

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Koji Sato, left, will hand the reins to Kenta Kon, a longtime lieutenant of Toyota Chairman Akio Toyoda. - Franck Robichon/EPA/Shutterstock

Toyota Motor’s chief executive is stepping down after a relatively short term in office that was buffeted by President Trump’s tariffs and struggles to maintain market share in China.

Toyota, the world’s largest carmaker, said Koji Sato, 56, would take a new role as vice chairman and focus on his work at industry groups. Chief Financial Officer Kenta Kon, 57, will be promoted to CEO, effective April 1.

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Kon is a longtime lieutenant of Toyota Chairman Akio Toyoda, grandson of the automaker’s founder and the power behind the throne at the company. Toyoda, 69, held the CEO post himself from 2009 to 2023 before handing the role to Sato.

Toyoda, a skeptic about whether electric vehicles would take over the global car market, was largely proved right in the U.S., and the carmaker’s lineup of hybrid gas-electric vehicles has helped it succeed among American car buyers.

Toyota was the world’s biggest carmaker in 2025 - Milan Jaros/Bloomberg News

Toyota said in November that it was investing more than $900 million to increase hybrid-car production in the U.S. to meet growing demand. The investment is part of Toyota’s plan to invest up to $10 billion in the country over the next five years.

While addressing U.S. military personnel in Japan in October, Trump said the Japanese prime minister told him about Toyota’s investment in U.S. auto plants. “Go out and buy a Toyota,” Trump told the troops.

Soon after, Automotive News published a photo of Toyoda wearing a “Make America Great Again” hat at an auto-racing event.

Toyota remained the world’s biggest carmaker in 2025. Group sales rose 4.6% to a record 11.3 million vehicles, led by the U.S. where it sold 2.5 million vehicles.

Still, the carmaker has been hit by the Trump administration’s tariffs. Japanese autos are subject to a 15% tariff following a trade deal struck with Tokyo in July. Last year, Toyota exported more than 600,000 Toyota and Lexus vehicles to the U.S. from Japan.

For the fiscal year ending in March, Toyota projects an operating profit equivalent to $24 billion, down 29% from the peak two years ago. The company said U.S. tariffs would reduce operating profit by the equivalent of around $9 billion.

The company pointed to profitability issues in announcing the elevation of Kon, who has spent his entire career at Toyota and has specialized in financial roles. “Concrete actions on these issues are urgently required,” it said.

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At a news conference Friday, Kon said the company needed to control costs and be better prepared to deal with any falloff in sales. “No matter how difficult the environment becomes, we should be able to generate profits,” he said.

China is another challenge. Toyota’s sales in the country stabilized last year at just under 1.8 million Toyota and Lexus vehicles. That is down about 8% from the peak in 2021, a less precipitous decline than many other foreign automakers. Toyota has had to cut prices in China to stay competitive with Chinese EVs.

Before Sato’s appointment as CEO three years ago, he appeared to enjoy chemistry with his then-boss, Toyoda. In a company video, the two men laughed and whooped it up during a test drive of a Lexus EV.

But that chemistry has been less visible recently and Toyoda, in the chairman’s role, has taken the stage solo for major company announcements such as the introduction in October of a stand-alone luxury brand called Century.

Toyoda didn’t attend the news conference where Sato and Kon spoke about the CEO switch.

Sato, an engineer by training, said Toyoda had described him as “raised in a white tower”—suggesting aloofness from the common people. He related an incident when he was admonished by Toyoda for failing to visit a factory facing issues involving safety certification. Once he got there, Sato said he realized it was right to talk to the workers in person.

Sato said he was perplexed when he first saw a proposal for the job change from Toyota board members, but later accepted it as necessary so he could focus on a new role leading an automotive industry group. Speaking of his three years as CEO, he said, “It was short, to be frank.”

Write to Kosaku Narioka at kosaku.narioka@wsj.com

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