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Toyota chairman coming under pressure due to scandals

Heory
Toyota chairman coming under pressure due to scandals

Shareholder support for Toyota Motor Corporation’s chairman, Akio Toyoda, has weakened significantly since a series of widely reported vehicle safety certification scandals came to light over the last year, which caused lengthy production suspensions of a number of key models this year.

Toyota reported a 4% drop in global group sales to 6,976,035 units in the first eight months of 2024, with sales in Japan down by 18% at 932,154 units. The popular Corolla Fielder, Corolla Axio and Yaris Cross were the latest models to be suspended, between June and September. Earlier in the year production of several models at the company’s small car subsidiary Daihatsu was also suspended for over three months.

Local reports this week suggested that large institutional investors including Nissay Asset Management Corporation, Mitsubishi UFJ Asset Management Company, Sumitomo Mitsui DS Asset Management Company and Fukoku Capital Management Inc, opposed the reappointment of Akio Toyoda as the company’s chairman at this year’s shareholders’ meeting in June. Akio Toyoda is the grandson of the automaker’s founder Kiichiro Toyoda.

Other institutional shareholders including Nippon Life Insurance Company voted in support of the current board, after receiving reassurances from the chairman that the company had identified the root causes of the scandals and had taken effective measures to prevent future lapses.

The chairman’s overall shareholder support has fallen to a low of 72% in June, however, from 85% a year earlier and from normal levels of over 90%.

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Last week Toyota announced it was increasing the size of its share buy-back this year from JPY1.0trn to JPY1.2trn (US$8.31bn).