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Akio Toyoda set to remain a force at Toyota as he bows out

REUTERS/Kim Kyung-Hoon
Market reaction to Toyoda's announcement was muted

Toyota Motor Corp chief Akio Toyoda is set to remain a dominant force inside the world’s largest automaker for years to come, and will continue to influence the agenda after stepping down in April, experts and people familiar with the firm said.

The 66-year-old Toyoda on Thursday announced he would step aside as leader of the company his grandfather founded from April 1 to take the role of chairman. He will hand over to Koji Sato, the 53-year-old head of Toyota’s luxury Lexus brand.

In recent years, Toyota has become a target of activists and green investors who had once heralded its hybrid technology, but who now slate its belated embrace of electric vehicles (EVs).

As US EV maker Tesla Inc stole attention for its innovation, Toyota, and Toyoda himself, often looked out of touch with the zeitgeist as they pressed the case for battery-petrol hybrids and eventually, hydrogen-fuelled cars.

Market reaction to Toyoda’s announcement was muted – the automaker’s stock price was little changed on Friday – as investors bet the company was unlikely to see a big overhaul in the foreseeable future.

“The new appointment is less about a change in direction and more about careful consideration of the best possible way to organise the handover, avoiding disruption and chaos,” said Julie Boot, an analyst at Pelham Smithers Associates in London.

“It’s likely that he’ll remain active as chairman for a long time and continue to put his mark on Toyota.”

At 53, Sato will become one of only a handful of “outsiders” – non-members of the Toyoda family – to have held the top job at an automaker whose position and influence within corporate Japan cannot be understated. Toyota’s supply chain extends to some 60,000 suppliers, making it critical to jobs in the world’s third-largest economy.

‘Apprentice Period’

But it remains to be seen how much influence the relatively young Sato will be able to exert, analysts said, given that many of the executives around him will be older – something that still counts for a lot in Japan.

He may not be able to deliver much of a strategy shift at first, and the next few years may be a kind of “apprenticeship period” said Koji Endo, senior analyst at SBI Securities.

There is also precedent in Japan for company founders, or their family members, to continue to wield outsized influence over day-to-day management even after becoming chairman.

Last year, the chairman and founder of electric motor maker Nidec Corp returned to the role of chief executive less than a year after relinquishing it, replacing the executive he had hired as his successor.

One Toyota executive, who asked not to be identified, said the automaker was headed for a period of “cloistered rule”, referring to a period in Japan’s history when a retired emperor continued to play a key decision-making role.

At a news conference on Thursday, broadcast on Toyota’s in-house media platform, Toyoda looked fully in control, turning from time to time to offer instruction and reminders to Sato.

Still, outsiders have been able to put their stamp on the company. Toyoda’s outgoing chairman, Takeshi Uchiyamada, is often credited with spearheading development of the Prius.

“Toyota is a public company that likes to pretend it’s a family company,” said John Shook, a former Toyota manager who now consults on the lean management techniques pioneered by the automaker.

“Choosing someone who is much younger and with Sato’s background indicates Akio recognised the time for change had come.”