Japan's top automaker Toyota names a new CEO after reporting drop in profits

TOKYO (AP) — Japan’s top automaker Toyota reported a 43% drop in quarterly profit 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. Approval by shareholders is expected in June.

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

Sato remains vice chairman at Toyota Motor Corp.

Kon, who has hands-on experience in various fields including automated driving, was tapped as an expert on ways to improve company earnings, according to Toyota. He is considered close to company chairman Akio Toyoda, the founder’s grandson.

All the Japanese automakers have been struggling because of rising material costs and the impact of U.S. President Donald Trump’s tariffs.

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

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

Toyota reported a 26% decline in profit in January-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 the year before.

Global vehicle sales for the nine months grew to 7.3 million vehicles from about 7 million vehicles, as sales increased in Japan, North America and Europe.

Sato, Toyota chief for the last three years, will continue to hold a key industry role as chairman of the JAMA, or Japan Automobile Manufacturers Association.

He also holds a leadership position at Keidanren, the Japan Business Federation, which oversees Japanese businesses overall. He said those responsibilities were so critical and industry transformation was so urgent that he felt he could do a better job if he resigned from his role as president at Toyota.

Toyota officials stressed that Sato was not being replaced due to a problem, noting the latest financial results showed the automaker was still doing well despite headwinds like the tariffs, which were outside its control.

Kon said people at Toyota were responsible, but they need to be more nimble since they tend to be reluctant to make changes to systems they worked hard to set up.

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

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

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Kenta Kon, right, an executive officer who has been named the next president of Toyota Motor Corp., poses for a photo with current President Koji Sato, left, in Tokyo on Friday, Feb. 6, 2026. (Yohei Fukai/Kyodo News via AP)

Kenta Kon, an executive officer who has been named the next president of Toyota Motor Corp. in Tokyo on Friday, Feb. 6, 2026. (Yohei Fukai/Kyodo News via AP)

Kenta Kon, an executive officer who has been named the next president of Toyota Motor Corp. in Tokyo on Friday, Feb. 6, 2026. (Yohei Fukai/Kyodo News via AP)

Kenta Kon, right, an executive officer who has been named the next president of Toyota Motor Corp., poses for a photo with current President Koji Sato, left, in Tokyo on Friday, Feb. 6, 2026. (Yohei Fukai/Kyodo News via AP)

BEIRUT (AP) — When the Israel- Hezbollah war broke out in early March, Hussein Shuman fled the heavy bombardment of the southern suburbs of Beirut, but he didn’t bother trying to rent an apartment elsewhere.

In areas deemed “safe” because the Lebanese militant group has no presence, he feels that Shiite Muslims like him are not welcome. Residents regard them with suspicion as potential Hezbollah members, and landlords charge exorbitant prices to rent to displaced families.

Instead, the 35-year-old, who works at a perfume company, headed to central Beirut where he set up a small tent where he has been staying, along with his wife, 7-year-old son and 5-year-old daughter.

Shuman even rejected an offer from a friend who invited him to bring his family to the Christian mountain town of Zgharta. He preferred to remain in his tent, even though it has flooded twice in the past two weeks.

“By staying here I have my dignity and respect,” Shuman said, sitting on a chair near his tent as a barber gave him an open-air hair cut. “We will not stay in a place where we are going to be humiliated.”

In a country full of suspicion, the more than 1 million people — most of them Shiite — displaced as a result of Israel’s evacuation orders and airstrikes have limited options.

Some landlords in Christian areas refuse to rent to Shiites. Others demand inflated rents and deposits that few can afford. Fatima Zahra, 42, from Beirut’s southern suburbs, said she and her sister sold their finest jewelry to pay the $5,000 the landlord charged up front for two months’ rent.

In some Beirut neighborhoods, displaced people who can afford to pay high rents are only allowed to take the apartment after landlords inform the security agencies to check on whether the family has any links to Hezbollah.

Sectarian tensions are a sensitive issue in Lebanon because the country fought a 15-year civil war ending in 1990 that largely broke down along sectarian lines.

Social frictions have worsened since Israel’s targeted airstrikes killed Hezbollah officials or members of Iran’s paramilitary Revolutionary Guard in predominantly Christian, Sunni and Druze areas, raising fears among the hosts that Hezbollah members are mingling within the civilian population.

The Lebanese are deeply divided over Hezbollah’s wars with Israel, with many in the small nation blaming the Iran-backed group for dragging the country into a deadly conflict that has so far left more than 1,300 people dead and over 4,000 wounded. Hezbollah fired missiles into Israel two days after the U.S. and Israel attacked Iran on Feb. 28, triggering the ongoing Middle East war.

The renewed war has caused widespread destruction and paralyzed the economy at a time when Lebanon is still in the throes of a historic economic crisis that broke out in late 2019. The country has not yet recovered from the last Israel-Hezbollah war in 2024.

In mid-March, an Israeli airstrike on an apartment in the town of Aramoun killed three people, prompting some local residents to call for the displaced to leave the area.

Days later, an airstrike on the nearby town of Bchamoun also killed three people, including a four-year-old girl, who were displaced from Beirut’s southern suburbs, where Hezbollah has a strong presence.

In neither case did Israel announce the intended target of the strikes, but neighbors assumed that someone in the targeted apartments was a Hezbollah member.

“Had we known that they were linked to Hezbollah, we would have kicked them out,” an angry man who owns an apartment in the building in Bchamoun said at the scene.

In late March, a missile exploded over the predominantly Christian Keserwan region north of Beirut, with debris falling on different areas. Although the Lebanese army later said that it was an Iranian missile passing over Lebanon that fell, many initially assumed that it was an Israeli airstrike targeting displaced people.

No one was was hurt by the missile debris, but a group of young men attacked displaced Shiites in the district of Haret Sakher near the coastal city of Jounieh, calling for their eviction, before local officials intervened.

“We don’t want them here,” shouted a Haret Sakher resident shortly after the strike. He said that some of the displaced refer to their hosts as “Zionists,” accusing them of being aligned with Israel because they criticize Hezbollah for dragging the country into the conflict. He added: “We don’t want national coexistence.”

George Saadeh, a member of Jounieh’s municipal council, told The Associated Press that he had called on Haret Sakher residents to avoid any reaction “so that we can preserve civil peace.”

In a predominantly Christian area just north of Beirut, plans to house displaced people in an abandoned warehouse near the port were suspended last week after drawing backlash from lawmakers and residents.

“The Israeli targeting campaign has created a lot of paranoia,” said Maha Yahya, director of the Beirut-based Carnegie Middle East Center. “If you see a displaced person, maybe you wonder, ‘What if this person is a target?’”

Fearing the tension could slip out of control, the army has beefed up its presence on the streets.

Last week, army commander Gen. Rudolphe Haikal toured Beirut and the southern city of Sidon and told troops that they should be “firm in the face of any attempt to undermine internal stability,” the army said in a statement.

Police forces, including a SWAT unit, were deployed at major intersections in the capital to preserve peace and prevent any friction between the displaced and locals. Police patrols pass through the tent city by Beirut’s coast where Shuman and his family are staying.

An official at the municipality of the predominantly Sunni town of Naameh, just south of Beirut, said that they have received thousands of people displaced from southern Lebanon.

The official said that in order to avoid tensions, they opened a school in one district for displaced Shiites and another in a different neighborhood for people displaced from Sunni border villages.

“There are concerns among people,” that conflict could break out said the official who spoke on condition of anonymity because he was not authorized to speak to the media.

With the Israeli airstrikes and ground invasion mainly targeting Shiite areas, U.S. ambassador to Lebanon Michel Issa, a Lebanese-American, was criticized for stoking sectarianism. He told reporters in late March that the U.S. had asked Israel for a commitment that Christian villages in southern Lebanon will not be attacked.

“We have asked the Israelis to leave Christian villages in the south alone and they told us that they will not touch Christian villages,” Issa said. However, he added, “They (Israelis) said that they cannot guarantee” that the villages would be left alone “if there is infiltration into these villages” by Hezbollah members.

Several Christian villages in southern Lebanon have asked displaced Shiites who were sheltering there to leave, fearing that their presence might trigger Israeli attacks.

Legislator Taymour Joumblatt who is the leader of the Progressive Socialist Party, the largest Druze-led political group in the country, said that the biggest concern in the country now is “strife.”

“The most important thing is to reduce sectarian pressures on the ground,” Joumblatt said. “Our Shiites brothers are part of this country and our humanitarian duty is to help them.”

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Associated Press writer Isabel DeBre contributed to this report from Beirut.

FILE — A displaced woman who fled Israeli airstrikes in southern Lebanon, carries her belonging as she moves to a better spot to shelter from the rain, past an Arabic anti-war poster that reads, "Sacrificing for whom? Lebanon does not need war," in Beirut, Saturday, March 21, 2026. (AP Photo/Hussein Malla, File)

Special forces police officers deployed amid tensions between people displaced by Israeli strikes and local residents in Beirut neighborhoods, Lebanon, Wednesday, April 1, 2026. (AP Photo/Hussein Malla)

FILE — A child walks past tents sheltering people displaced by Israeli airstrikes in southern Lebanon and Dahiyeh, Beirut's southern suburbs, along the Beirut waterfront in Beirut, Lebanon, Saturday, March 14, 2026. (AP Photo/Hassan Ammar, File)

Special forces police officers deployed amid tensions between people displaced by Israeli strikes and local residents in Beirut neighborhoods, Lebanon, Wednesday, April 1, 2026. (AP Photo/Hussein Malla)

File — Smoke rises from Israeli airstrikes in Dahiyeh, a southern suburb of Beirut, Lebanon, Tuesday, March 3, 2026. (AP Photo/Hussein Malla, File)