Toyota Motor Corporation (NYSE:TM) traded slightly higher on Thursday after the world’s second largest automaker by revenue announced its first CEO transition in 14 years. Koji Sato will become president and CEO on April 1 and longtime CEO Akio Toyoda will step down to become chairman.
In its first breakdown of the CEO development, Bank of America called the Toyoda resignation and succession announcement surprising.
“We need to monitor the impact of the change in CEO. Mr. Toyoda is a member of the founding family, he won confidence both inside and outside Toyota for the earnings recovery staged after the East Japan Earthquake, and he is a powerful spokesman to the outside world,” wrote analyst Kei Nihonyanagi.
BofA has the view that a wide-ranging management team will be pursuing the mobility company model. Toyota (TM) is said to have decided to accelerate change in an auto industry that is undergoing structural change, with the first focus appearing to be the new executive structure.
Japan-based Au Kabucom Securities analyst Tustimo Yamada also expressed surprise at the young age of the new CEO. “My initial reaction was how many executives has he skipped?. This is a big decision that nobody else but only Akio Toyoda could make,” he noted. The appointment is expected to accelerate Toyota’s generation change, whether it will be good or bad.
UBS Sumi Trust Wealth economist Daiju Aoki also weighed in on the Toyota shakeup.
“Toyota, from the overseas investors’ perspective, has been seen as sluggish in the electrification race because the company has deployed a variety of options, not just electric vehicles but hydrogen and existing gasoline-powered cars. This personnel change can be an opportunity for Toyota to cast off its backward image if they can show a focus on businesses based on the next-generation energy, including electric vehicles.”
Shares of Toyota (TM) were up 0.79% premarket to $147.30.
Read the latest breakdowns on Toyota (TM) from Seeking Alpha authors.