New Toyota CEO Koji Sato faces big challenges in critical new era

TOKYO – The man replacing Akio Toyoda as the new CEO of Toyota Motor Corp. is a cosmopolitan car-guy engineer with an eye for luxury and a thirst for speed.

In fact, in many ways Koji Sato is a mini-me version of his long-time mentor.

As the head of the Lexus premium brand and Gazoo Racing motorsports division, Sato’s mission was to break the boring-old Toyota mold by developing fun-to-drive cars that are stylish and cool. He succeeded by channeling Akio’s encouragement to take risks and stir things up.

“President Toyoda always told us it’s OK to fail,” Sato said after being tapped as the next CEO from April 1. “If you never test your limits, then new creations are never born.”

Sato’s new challenge will be applying that mindset to the whole company.

He must not only navigate a largely hidebound legacy metal-bender through an industry under siege by electrification, autonomous driving and connectivity. As the new boss, Sato must transform the world’s largest automaker into a “mobility company,” with whatever that entails.

Toyoda, 66, said Sato’s “youth” – at 53 – will help write the next chapter of Toyota history.

“The new team under incoming President Sato has a mission to transform Toyota into a mobility company,” Toyoda said in announcing the appointment Jan. 26. “He has youth and like-minded colleagues. I expect this new team to go beyond the limits that I can’t break through.”

Toyoda, the grandson of the carmaker’s founder, took the helm in 2009 and steered the family’s namesake company through a long period of unprecedented tumult and soaring prosperity.

Sato, as the first non-family CEO in more than a decade, could keep a hand on the wheel through 2030, a stretch that promises rapid and disruptive upheaval for the entire auto industry. His ability to either adapt and deliver or flounder could have a pivotal impact on Toyota, analysts say.

“There are a lot of complicated issues to contend with over the next decade; there is going to be a lot of change,” said Christopher Richter, lead Asia auto analyst at CLSA in Tokyo. “Toyota is starting from a great base, but Mr. Sato certainly has his work cut out for him.”