As it struggles to adapt to the change to electric vehicles, Toyota Motor Corp.'s top executive will leave his position as the firm his grandfather founded and pass the reins over to the head of its luxury car division, the Japanese automaker announced on Thursday.

Akio Toyoda will become chairman on April 1, and Koji Sato, the automaker's 53-year-old chief branding officer and president of Lexus, Toyota's luxury brand, will take over as CEO.

Takeshi Uchiyamada, the current chairman, will step down from his position but continue to serve on the board.

For investors, the question of who will succeed Toyoda, the 66-year-old grandson of the company's founder, has become more and more important. However, the announcement of the succession's time was a surprise.

The automaker has taken a cautious approach to electric vehicles under Toyoda, claiming that investments in hydrogen as well as the hybrid technology it pioneered with the Prius will remain crucial.

Investors and activists who formerly largely hailed its technological and environmental record are now criticising that strategy.

Toyoda stated that Sato's goal would be to turn Toyota into a "mobility company," although he did not elaborate on this plan.

The automaker has taken a cautious approach to electric vehicles under Toyoda, claiming that investments in hydrogen as well as the hybrid technology it pioneered with the Prius will remain crucial.

Investors and activists who formerly largely hailed its technological and environmental record are now criticising that strategy.

Toyoda stated that Sato's goal would be to turn Toyota into a "mobility company," although he did not elaborate on this plan. Toyoda oversaw the manufacturer for more than a decade during a time of rapid change in the industry and growing scepticism about the ability of established automakers like Toyota to fend off the challenge from newer, frequently more nimble, entrants like Tesla.

At a press conference, Toyoda stated that his tenure as Toyota's CEO began in 2009 with "crisis after crisis," including the global economic downturn's consequences, Toyota's own recall and safety crisis, and the upheaval that followed the 2011 earthquake and tsunami in northern Japan.

According to his profile on the Toyota website, Sato began his career with Toyota in 1992 and progressed through the ranks to become head engineer of Lexus International, a luxury auto brand owned by Toyota, in 2016.

Since 2020, he has served as the president of both Lexus International and Toyota's motorsport division, Gazoo Racing Company. In January 2021, he joined Toyota as an executive and was named the company's chief branding officer.