We Don't Expect Major Strategy Changes From Toyota's Incoming CEO

Toyota announced on Jan. 26 that president and CEO Akio Toyoda, 66, will step down from those roles on April 1 and become chairman. He’s been leading Toyota since 2009. Lexus president, Koji Sato, 53, will become president and CEO of Toyota and retain his title of operating officer. Toyoda in recent times has been asked about his succession plans, and he is stepping down at about the same age as prior CEOs, so the move isn’t a total shock. We will miss him in the role because we’ve always liked his passion for cars and for making Toyota vehicles much more interesting and exciting to look at, even for traditionally bland midsize sedans such as the Camry. Sato, however, also deserves credit for this change as he led the development of the Lexus LC coupe and is currently president of Toyota’s GAZOO Racing. Sato is an engineer by training and joined Toyota in 1992. He became Lexus chief engineer in 2016, and chief branding officer of the whole company in 2022. We see no reason to change our fair value estimate, and we expect no major changes in strategy from Sato, at least right away. Toyoda said that Sato can best move Toyota to change into a mobility company from a carmaker, partially because of his younger age.