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Toyota founder's grandson to head firm

2009-01-20 13:53

Tokyo - Toyota Motor Corp named Akio Toyoda, grandson of the company's founder, to head the company and lead it through the global crisis that has slashed demand for cars worldwide.

Toyoda, 52 and currently executive vice president, will replace 66-year-old Katsuaki Watanabe as president in June as part of a reshuffle of top management at the world's largest automaker, Toyota said in a statement on Tuesday.

Watanabe, whose second two-year term ends in June, will become vice chairman as Akio becomes the sixth Toyoda to head the company.

Toyota and its rivals are grappling with slumping sales in North America, Europe and Japan amid a spreading recession in rich countries, with sales also slowing in emerging markets such as China and Russia.

The sharp downturn in the US has pushed rivals General Motors Corp and Chrysler LLC to the brink of collapse.

Toyoda will be taking the helm of an automaker in far better shape but hurting nonetheless. Toyota is heading for its first-ever consolidated operating loss in the year to March 31, hit also by a stronger yen, after reporting record high earnings last year.

Shares of Toyota rose 2.3% to close at 3 100 yen in Tokyo, boosted by Toyota's announcement during trade that it would be unveiling a new management structure - which had been widely tipped to put Toyoda into the president's chair.

Koichi Ogawa, chief portfolio manager at Daiwa SB Investments, said Toyoda and his new team need to act quickly to scale back investment and cut costs.

"Right now the important thing is to stop the bleeding," he said. "Management of the business has not gone well over these past three years. They expanded too much."

Sales falling

Underscoring the tough market conditions, Toyota said on Tuesday that sales across the group fell 4% to 8.972 million vehicles in 2008, in line with previous company forecasts.

For the parent only, which excludes minivehicle maker Daihatsu Motor Co and truck unit Hino Motors Ltd, sales fell 5% to 7.996 million vehicles, Toyota said in a statement. Sales at the two units rose from 2007.

The tally is almost certain to keep Toyota ahead of General Motors Corp as the world's biggest automaker after the US giant suffered a 23% drop in the United States in 2008, compared with Toyota's 16% fall. The United States is the single-biggest market for both automakers.

GM is scheduled to announce its 2008 sales on Wednesday.

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