Akio Toyoda's Shock Resignation: 4 Surprises and 1 Fear That H The Auto Industry Buzzing

This morning, news broke out that Toyota CEO and the Grandson of the mastermind that started it all Akio Toyoda had resigned as the president of Toyota and its sister companies. This came to a shock after the fact that no one saw this coming. Usually there is scandal and conspiracy that makes the news before a CEO/President is forced to resign. As of the time of writing this article, Toyoda has not said anything as to why he stepped down. However, in a recent article by Reuters, Robert Bissel compiled a few reasons and reactions to Toyota stock holders and critics. One of them fears for the worst. The next few paragraphs will be taken from the article with my adding of opinion.

SEIJI SUGIURA, SENIOR ANALYST, TOKAI TOKYO RESEARCH INSTITUTESEIJI SUGIURA, SENIOR ANALYST, TOKAI TOKYO RESEARCH INSTITUT
"The timing of this was a surprise. Given that it happened after the share price broke below 2,000 yen, there may have been a sense of stagnation leading to speculation that the top management would be replaced. Koji Sato is a young person who likes cars, and there's the impression that he was chosen to give a certain impression outside the company.”

This is a very feasible reason as to why Toyoda resigned. Toyota stock had been a little off lately so it’s okay to assume that this was a share price related resignation.

HIROSHI NAMIOKA, CHIEF STRATEGIST AND FUND MANAGER AT T&D ASSET MANAGEMENT
"As seen in the case of Nidec, another Japanese manufacturer that has extensive supplier networks and is run by a charismatic founder-chairman ... The selection of the next leader is a crucial factor in these companies’ future course.” Toyota has been cooking up some plans to get their chip supply in order in a reliable fashion. Toyoda had tried many tactics and they seemed to work for a short time but experts say Sato, the new president, could have better solutions.

TSUTOMU YAMADA, MARKET ANALYST, AU KABUCOM SECURITIES
"This was a surprising appointment. He's so young ... my initial reaction was 'how many executives has he skipped?'. This is a big decision that nobody else but only Akio Toyoda could make.”

I think Akio Toyoda definitely had a plan for the future of his grandfather’s company. The Japanese have a lot of self-discipline and good values as race. I’m sure this was hard for him, yet he knew it had to be done.

JULIE BOOT, ANALYST AT PELHAM SMITHERS ASSOCIATES, LONDON
"I'm afraid at this point we can only speculate. In my view, the new appointment is less about a change in direction and more about careful consideration of the best possible way to organize the handover, avoiding disruption and chaos. Unlike other head of companies who were founders or related to founders (for example Osamu Suzuki or Shigenobu Nagamori), Akio Toyoda has never put his own person first, but focused very much on what is best for the company. It's true. Akio did not inherit Toyota from his family. He studied hard and made his way up the ladder until he reached President.

DAIJU AOKI, CHIEF JAPAN ECONOMIST AT UBS SUMI TRUST WEALTH
“The personnel change underscores a transition to the next stage after a decade of recovery from the global financial crisis, led by the founding Toyoda family. After the almost crumbling financial crisis in the mid 2000’s, Toyota didn’t need to be bailed out unlike GM, however, this caused massive layoffs and a lot of shut down factories. This could also be a pretty big reason.

YOSHIAKI KAWANO, ASSOCIATE DIRECTOR AT S&P GLOBAL MOBILITY
"The incoming president will face a challenge of maintaining a full lineup of vehicles. He is tasked to aggressively promote zero-emission battery electric vehicles while making sure existing (gasoline engine) models also sell well, which will take considerable human and financial resources and investment." Interestingly enough, we still do not know the stance of EV production and development for the new President. Will he follow the path that Akio was so passionate about? What do you think? What will the future of Toyota look like? Let us know in the comments below.

Harutiun Hareyan is reporting Toyota news at Torque News. His automotive interests and vast experience test-riding new cars give his stories a sense of authenticity and unique insights. Follow Harutiun on Twitter at @HareyanHarutiun and on YouTube at Toyota Time for daily Toyota news.