TOKYO (AP) — Toyota reported a 43% drop in quarterly profit on Friday and announced that its chief financial officer, Kenta Kon, will become its new chief executive and president.

Kon, a Toyota veteran, will replace Koji Sato in both roles in April. Shareholder approval is expected in June.

“This expresses our determination to move towards change with all our strength,” Sato told reporters, calling the latest personnel changes part of a “gear change.”

Sato remains a vice president at Toyota Motor Corp.

Kon, who has practical experience in several fields, including automated driving, was selected as an expert on ways to improve the company's profits, according to Toyota. He is considered close to the company's president, Akio Toyoda, grandson of the founder.

All Japanese automakers have been struggling due to rising materials costs and the impact of US President Donald Trump's tariffs.

Toyota, which makes the Camry sedan and Lexus luxury models, estimates that tariffs wiped 1.45 trillion yen ($9.2 billion) off its operating profit last year.

For the October-December quarter, Toyota group profit totaled 1.25 trillion yen ($8 billion), down from 2.19 trillion yen in the same period a year earlier.

Toyota reported a 26% drop in profit from January to December, at 3.03 trillion yen ($19 billion), down from 4.1 trillion yen. But its sales rose nearly 7% to 38 trillion yen ($242 billion) from 35 trillion yen a year earlier.

Global vehicle sales for the nine months grew to 7.3 million vehicles from about seven million vehicles, as sales increased in Japan, North America and Europe.

Sato, head of Toyota for the past three years, will continue to play a key role in the industry as president of JAMA, or Japan Automobile Manufacturers Association.

He also holds a leadership position at Keidanren, the Japan Business Federation, which oversees Japanese businesses generally. He said those responsibilities were so critical and the industry's transformation so urgent that he felt he could do a better job if he stepped down as president at Toyota.

Toyota officials emphasized that Sato was not being replaced because of a problem, noting that the latest financial results showed the automaker was still doing well despite headwinds like tariffs, which were out of its control.

Kon expressed that people at Toyota were responsible, but they need to be more responsible. agile as they tend to be reluctant to make changes to the systems they worked hard to establish.

Toyota, based in Toyota City in central Japan, raised its profit forecast for the full fiscal year to 3.57 trillion yen ($22.8 billion), down 25% from a year earlier. Toyota's Tokyo-listed shares rose 2% on Friday after the announcements were made.

“For Toyota to continue advancing its transformation into a mobility company, it is necessary to not only strengthen collaboration in the industry, but also expand partnerships beyond the industry,” the company said.

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Yuri Kageyama is in Threads: https://www.threads.com/@yurikageyama

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This story was translated from English by an AP editor with assistance of a generative artificial intelligence tool.