Toyota profit plunges 43% and names CFO as CEO after $9 billion tariff hit
Toyota reported a 43% slide in quarterly operating profit after absorbing a $9 billion cost from new US tariffs, marking the company’s largest profit drop since the pandemic. The automaker appointed CFO Kenta Kon as CEO, replacing Koji Sato in its second leadership change since 2023.
1. Profit Decline and Tariff Impact
Toyota’s latest earnings revealed a 43% drop in operating profit, driven largely by a $9 billion hit from US import tariffs. This marks the steepest profit contraction since the global chip shortage in 2021 and underscores mounting cost pressures on its North American operations.
2. CEO Transition and Executive Roles
CFO Kenta Kon has been appointed as Toyota’s new CEO, succeeding Koji Sato after just three years in the top role. Sato will transition to vice chairman as Toyota splits industry oversight and management duties between executives.
3. Strategic and Financial Implications
The rapid leadership turnover highlights Toyota’s urgency to stabilise profitability and adapt its cost structure. Investors will be watching how Kon leverages his financial expertise to counter rising raw material and tariff expenses.
4. Outlook and Market Reaction
Analysts say the CEO change and earnings shortfall could weigh on Toyota’s near-term stock performance, though renewed focus on operational efficiency may restore confidence. The company signalled plans to review its supply chain and pricing strategy ahead of its next annual guidance update.