I would like to reiterate what you are seeing. Regarding the purpose and aim of this personnel change that Mr. Tomikawa just mentioned, I would like to explain it briefly first. The purpose of this personnel change is a formation change for Toyota to tackle the management challenges it will face going forward with all its might. I believe there are two major challenges. The first is that it has become a very important phase to enhance the earning power that will support the future within the automotive industry. Toyota has been laying the groundwork for the past two years. From there, we need to shift gears and pursue further productivity improvements and the creation of both products and vehicles. We are entering such a phase. Being at this turning point is one thing. The other is to accelerate industrial collaboration. To maintain the international competitiveness of the automotive industry in the future, the industry must unite as one to materialize areas of strength and find Japan's value chain. In a situation where we are required to evolve vehicles in unison with social infrastructure, I believe the key is collaboration with partners across industries. In other words, I understand that Toyota's role in the industry has become greater than ever before. In light of this, the Personnel Appointment Deliberation Council made a proposal. Based on that proposal and the current situation, we considered what the optimal Toyota structure should be. Based on that, we judged that a formation change of the K-team is necessary for the future of Toyota and the industry. We made this decision and held a board of directors meeting today to resolve the change in roles. Going forward, the President will serve as CEO, focusing on the automotive industry, and will actively promote the efforts to enhance the earning power I mentioned earlier. Mr. Koji Sato is well-versed in finance and accounting. As many of you know, he recently served as the CFO of Woven by Toyota, where he experienced promoting reforms within the automotive industry from an external perspective. I believe he will be able to发挥 the strengths he possesses and demonstrate leadership in promoting overall optimization without being constrained by functional silos. As for myself, as Vice Chairman and Chief Industry Officer, I intend to become even more involved in the Japan Automobile Manufacturers Association and economic and industrial activities. I want to increase the speed of practice in connecting Toyota and the industry, and I will continue to move on the ground to make that happen. I want to continue to move around more than ever before. At Toyota, we have always said that we work based on roles, not titles. Since I became President, I have always kept in mind not to slow down the speed of management and to continue taking action. I believe this is a form of team management that Toyota's executive team has cherished. To help make the automotive industry and Japan even more vibrant, we will form a new formation and each fulfill our roles. I ask for your continued understanding and support.
Thank you. You just explained the new formation as a new form of team management, but how did you honestly feel at the moment you received the proposal from the Personnel Appointment Deliberation Council?
Well, honestly, as a human being, I was very troubled at that moment. Actually, discussions about the chairman of the Japan Automobile Manufacturers Association had been going on since around autumn. I was having various discussions with top executives of various companies. For various reasons, as the voices calling for Toyota to take the lead grew louder, I was wondering if I could do both the activities of the association and my responsibilities as the head of the executive team at full swing. I was already thinking about that. But as humans are weak, I couldn't bring myself to say it. While I was struggling with that, the Personnel Appointment Deliberation Council raised the question of whether I could fight in the current formation with those two important roles. I was startled. I thought, 'Wow, the governance is really working.' I realized that a third party was pointing out that the current situation was quite overloaded. Thanks to the Personnel Appointment Deliberation Council raising this, I was able to step back and look at it calmly. I remember thinking that this is something we should consider.
I see. So, on one hand, you were fully engaged in your roles as Chairman of the Japan Automobile Manufacturers Association, Vice Chairman of Keidanren, and other national duties, but on the other hand, you also had a feeling that you wanted to continue as President, right?
Yes. Well, how should I put it... I've always grown up on the front lines and love car manufacturing. While I've been doing this, of course, the role of the President is... well, it's a role, right? But I really believe that car manufacturing is something worth dedicating my life to. So, there's a part of me that wants to stick to it. That's why I had a lot of conflict.
Mr. Akio Toyoda served as President for 14 years, but you served for 3 years. Isn't that short? I knew I'd get that question, sorry.
Honestly, I think it's short. But I have two thoughts. It's only been 3 years, but it's already been 3 years. The speed of the automotive industry isn't that slow. So the time axis of the past and the current 3 years are completely different. And when I became President, the then-President Akio Toyoda asked me to become President. He told me that the car manufacturing he had been doing for 14 years was still unfinished. He asked me to do the ending, or rather the finale, together. That was the starting point. When I had a long talk with Chairman Toyoda at the end of January, he told me that he wanted to be of help in making Japan a better place. When he said he wanted to make good cars together, it overlapped with what Chairman Toyoda had said. I felt like I had a clear idea of where I should be. My determination was solidified. Another thing is that I believe in 'attack is the best defense.' As a manager, I think we shouldn't be on the defensive at this stage. If I'm on the defensive, my judgment will be clouded. I'll be thinking, 'I haven't done this yet, I want to do that.' At this stage, it's absolutely not good to be on the defensive. So, if we think of defense as 'you,' and the chairman of the association is coming this year, if there's something we have to do at this timing, 3 years isn't short, is it?
I see. When you said 3 years was short, I thought you might have done something wrong and that this was that kind of press conference. Honestly, I just received a LINE message from a friend asking, 'What did you do?' To be clear, there's nothing like that. As I just mentioned, this is a very positive discussion. I want you to understand that first and foremost. And to my friends, please stop sending me weird LINE messages. Final answer? You don't ask like that, do you? No. Thank you. As mentioned in the release, not only the personnel changes effective April 1st, but also the personnel changes effective at the 122nd Ordinary General Meeting of Shareholders are listed. Looking at that, it says you are scheduled to be appointed as a Vice Chairman from a Director. Does that mean you will step down from the Board of Directors? Of course.
Yes. I think this has two meanings. One is that I want to maintain the efforts Toyota has made so far in terms of corporate governance, while being conscious of the corporate governance code. The Board of Directors has become a place where all directors participate and seriously discuss how to win for Toyota. In light of the diversity and number of members of the board, I think titles are important in society. But Toyota isn't really like that. So, from that perspective, I want to protect what Toyota should value from the perspective of corporate governance. The other is that the badge of Toyota's President or Director isn't necessarily positive for what we're going to do. It can sometimes be a hindrance. For example, the themes we're trying to tackle in the association are really cross-industry themes. We need to break through the situation where everyone is just agreeing to disagree. Sometimes, when I try to take some leadership, having a Toyota badge on... it just becomes peer pressure towards Toyota. I've felt that way until now. I was feeling a bit fuzzy about it, saying, 'Let's do this,' but how much understanding can I really get by saying 'for the industry' while wearing a Toyota badge? I think so. So, I really think I need to be in a position where I can be a genuine advocate for what I want to do. If not, I can't carry out the major industry reforms I'm trying to do. That's what I'm thinking.
Mr. Sato, thank you for waiting. When and from whom did you hear about this role change?
Yes. Well, I heard about it in mid-January. As Mr. Sato just mentioned, I was told by a director of the Personnel Appointment Deliberation Council that there was such a plan.
How did you feel when you first heard it?
Well, I'm very sorry to the director, but honestly, I was quite surprised. My mind went blank. I don't really remember the details of the conversation that followed. I heard from the director who was present that it was along the lines of what Mr. Sato just said. I thought, 'Ah, so that's what it is.'
So you didn't think it would be you? Since your mind went blank.
Who did you think would become President?
I hadn't really thought about it. It's only been 3 years, after all.
But you have experience as a Senior Managing Officer.
When I was a Senior Managing Officer, did I think I might be next? No, I didn't think that at all. Yes.
So it was a completely unexpected appointment.
It might be difficult to get motivated.
That's right. Honestly, as of today, I don't have everything completely figured out. That's the honest truth. And today, what Mr. Sato said was a big learning experience for me. Going forward, I will consult with the Chairman, Mr. Sato, and other executive members to decide the direction after April 1st, what kind of team to build, and so on. Since the team is now participating in the All Japan competition, the scope and size of Toyota's team management have become a bit larger. I will think hard about all of this and do my best.
Will you be able to use the experience you gained at Woven by Toyota, as Mr. Sato mentioned?
Yes. I am currently at Woven by Toyota. It has many young members and is a software development company, so it has a different, more agile way of thinking compared to hardware. It's a company that does thorough information sharing, which I think Toyota should also do properly. The experience of agile development, which is absolutely necessary, and the experience of looking at Toyota from a slightly different perspective, even though it's a company very close to Toyota, are very significant for me. There were many things I couldn't understand in my previous company life, things I thought were amazing, and things I thought were a bit... well, I had a lot of those. I want to make use of that.
Just one thing. What did you think was a bit... well, at Toyota?
There are so many things. For example, Toyota has incredibly hardworking people. Each person has a strong sense of mission. And there's a huge accumulation of past achievements. On the other hand, when trying to do something new, there's a tendency to stick to past methods and past equations. I think that's very important for improving the current business, but for new things, I often thought we might need to do things differently.
I see. Is that something you, as President, can say is a weakness of Toyota?
No, I completely agree. You know, there are a lot of things you can only see from the outside. People are arrogant without meaning to be. I think you chose your words carefully just now. The company has very strong functional silos. The people doing the operations have no ill intent at all. Everyone is trying their best, but sometimes the overall optimization, the horizontal collaboration, becomes weak. When you look at that from the perspective of an environment where agile development is being done, it can look a bit conservative and like there are walls. Having that objectivity to change Toyota is incredibly important. I myself was in the engineering department for a long time. As Chairman Toyoda would say, I'm a product of the 'White Ivory Tower.' So, in that sense, I think the world Mr. Sato has seen will be a driving force to significantly change the future of Toyota.
I see. On the other hand, Mr. Sato, you were often seen on the front lines, even after the certification issue. You saw Mr. Toyoda's presence, of course, but is there anything you felt on the front lines that you want to carry forward or pass on to Mr. Sato?
Well, when I took office, I was focusing on how to materialize Toyota's mobility concept and aim to become a mobility company. And what happened at that time was the certification issue. The advice I got from Chairman Toyoda at that time was really simple. It was just one thing: 'Sato, a president goes to the front lines.' That's it. I grew up in development, so I thought I understood the front lines to some extent. But when I actually went, I realized I didn't understand at all. Toyota really has people working incredibly hard at every factory and every development site. There are so many invisible heroes. I felt that I had been talking about the front lines without knowing about everyone's hard work. I spent the past two years thinking about what I could do to make it easier for them to work even harder. This is a bit sentimental, but there's a test course at the foot of the mountain. My juniors asked me to come and drive a car. I went, and I drove all day. The eyes of the kids doing development were so beautiful, sparkling. I'm sorry for this emotional story. When I became President, I said I wanted to be a president who continues to make cars. I thought I really wanted to let these kids, these guys, make cars with all their might. The sparkle in everyone's eyes at that time really struck me. What can I do for them? It's not about me jumping in as an engineer. It's about creating an environment where they can do what they want to do. It's no longer a time when you can do that just by working hard within Toyota. I think Toyota's business exists in connection with the industry, the economy, and society. At the beginning of this year, Chairman Toyoda wrote the kanji for 'field' as the kanji of the year. I thought, 'Ah, it's a field.' The field where we should work is expanding and changing. When I thought about where I should be, I came to this decision. By working hard in the field from now on, I can create an environment where they, who have seen me working hard, can continue to do the car manufacturing they love. That's my field, and I can do it in the future.
You just talked about loving cars. Mr. Toyoda was an uncle who loved cars. Mr. Sato was an uncle who loved making cars. What kind of uncle are you, Mr. Sato?
An uncle who is... well, I also love cars. But I'm currently in charge of finance. So I'm very particular about the money and revenue that allow us to properly invest in making cars.
So you're an uncle who loves money and numbers?
Well, I love money, but it's not like I just want to hoard money. After I heard about this from the Personnel Appointment Deliberation Council, I had a chance to talk with the Chairman. At that time, the Chairman mentioned the name of Mr. Ishida Dai. He was the one who supported Mr. Kiichiro Toyoda's automotive business. Mr. Ishida was also very particular about money. He wouldn't spend a single yen on anything wasteful. But he made bold, large investments in Mr. Kiichiro's dreams. I think that's still the same at Toyota today. As I said earlier, I love money, but Toyota's profits aren't generated by Toyota alone. So, I think Toyota must invest properly for the future, for others, and for the entire automotive industry and Japan. I want to work hard to build a corporate structure that can do that. I think that's why the Chairman mentioned Mr. Ishida's name.
I see. The release mentioned that improving the break-even point is an important issue for Toyota. On the other hand, Mr. Sato, in your New Year's address, you said you want to make 2026 a turning point for agility, and that you have entered a phase of focusing on productivity and taking action. Does this mean that instead of increasing the number of units, you will focus on quality, including the financial aspect?
Yes. I think it's both. But there are still many customers waiting for delivery, and there are constraints on production. So, as a base, it's very important to deliver as many cars as possible to customers. On the other hand, as you said, quality... Toyota doesn't have a profit target like 'we aim for X trillion yen,' but no matter how tough the environment gets, we must be able to generate solid profits and not have to stop operations or do drastic things. I think that's the profit structure that stakeholders expect from Toyota. To maintain that, we need to lower the break-even point and build a structure where we can hold on during tough times.
You know, if you don't have the earning power, you can't do what you want to do. I think we need to build that earning power to do what Toyota should do.
Mr. Sato is being modest and not showing his car-loving side, but I'll say it. I once had a minivan talk with Mr. Sato. Mr. Sato loves minivans. If you get him talking about minivans, he'll passionately talk about the Noah and Voxy.
No, I think he's quite a car lover, at least from my perspective. Minivan limited. Minivan limited. I shouldn't have said that.
But Mr. Sato also participated in the Rally Challenge last year. When he participated last year, I was covering it and said something like, 'Let's have a match in a year.' Can you continue to participate in rallies and other competitions where you drive the car yourself?
Yes. I'll try to find opportunities to drive, just like before.
I'm relieved. I'll be ready to compete. I'm sorry, I shouldn't be talking about competing with my level of skill. Well, we're running out of time. Mr. Sato, did you discuss this role change with Mr. Toyoda?
Yes. As I mentioned earlier, I talked with the Chairman in January. He said he wanted to be of help in making Japan a better place. It was such a simple statement, but because Chairman Toyoda's scope and thoughts were so simple, it really came across. So, there were no detailed discussions about changing the management structure or formation. Everyone might be thinking about that, but there are none. In fact, there are almost none. But it was about the big picture. We talked about how we've been saying we want to be of help in making Japan better and revitalizing the industry. I think everyone wants to hear this, so I'll ask. Was Mr. Toyoda involved in this personnel change? Not at all. As I mentioned earlier, he wasn't involved. He wasn't involved. Well, he probably has his own opinions, but he wasn't involved in the decision-making. In terms of Toyota's personnel structure, the Personnel Appointment Deliberation Council has the authority to proceed with personnel matters. So, after reviewing the committee structure and establishing a committee-based company since the last general meeting of shareholders, a new board of directors structure was created. The Personnel Appointment Deliberation Council was also reviewed with new members, and its activities started. From that stage, we were discussing what the future management structure of Toyota should be. For example, in risk management, if something happens to the current President, how should we recover as a management team? How should we prepare for the successor of the President? We've been discussing these things. In the case of this matter, my own appointment as Chairman of the Japan Automobile Manufacturers Association was largely decided at the end of last year. So, from that timing, we moved into specifics on what to do about the discussions we had been having. We had discussions with me, and ultimately, I made the decision to propose this to the Board of Directors at the General Meeting of Shareholders. How does Mr. Toyoda accept this personnel change? As Mr. Sato just said, it's about having a flexible formation that matches the timing. And from Chairman Akio Toyoda's perspective, he is 69 years old this year, and he says he wants to focus on three things as Chairman. One of the biggest is human resource development. He wants to create an environment where people can learn management practices under Akio Toyoda and build a system to manage Toyota. Creating that opportunity is important. He believes that this formation change will make Toyota stronger. And if Toyota becomes a strong company that can fight well, it will in turn revitalize Japan's industry. He has this kind of thinking, so I believe the Chairman has accepted this personnel change with that in mind.
I see. You just mentioned the three things you need to do as Chairman. We will be distributing a voice-only Toyota Times this month, so please look forward to it. Now, I would like to take questions from the reporters in the venue. If you have a question, please raise your hand. When I call on you, please state your media name and your name. Since time is limited, we will take one question at a time for now. If there's time later, I'll call on you again. Now, please raise your hand if you have a question. Okay, from the front. You were the first to raise your hand.
I'm Joka from Nikkei Cross. I'm sorry. I'd like to ask about the direction of technology development. I'm sorry if I'm wrong. Regarding end-to-end autonomous driving technology, companies like Tesla and Chinese companies are accelerating development. What is Toyota's current level of capability, and what policy will you take to develop it in the future? I would be grateful if you could explain your current thinking.
Yes, thank you. Regarding autonomous driving, if we look at it more broadly, why does Toyota develop SDVs? The axis that the Chairman clearly showed us a while ago is zero accidents, zero traffic accidents. I don't think it's an easy path to get there, but I think we are making steady progress step by step. Some manufacturers, like Tesla and some others, have been working on it very early with AI-based and ML-based approaches. So, it's not that Toyota is winning against all of them. There's a lot we can learn from them. On the other hand, Toyota has sales of 10 million units and a fleet of 150 million units. The data we can get from that is very large. So, I think our ability to catch up quickly is one of our strengths. We will continue to develop products that are well-received by customers, like the Toyota Safety Sense, and ensure safety, while also working on future AI-based, fully autonomous driving. We will work on both.
