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Toyota Motor Corp. announced Wednesday that Senior Managing Director Akio Toyoda, a scion of the founding family, will become an executive vice president, in what is widely speculated as a step toward the top job at the nation’s largest automaker.

Toyota also named Executive Vice President Katsuaki Watanabe as its next president, taking over from Fujio Cho in a management shuffle that takes place amid its global expansion.

Watanabe will be the third president in a row to come from outside the Toyoda clan and speculation is rife over when a founding family member will be given the helm.

Cho, 68, who has been president since 1999, will become vice chairman, while Chairman Hiroshi Okuda, 72, will continue in his position, the company said.

“The new management is the best fit to lead Toyota to continued growth in the 21st century,” Okuda told a news conference in Tokyo.

Reform has to be carried out while the company’s business is strong, Okuda said, adding it will be too late to do so if things go wrong.

The appointments will take effect in June, pending shareholder approval.

Wednesday’s announcement came a week after Toyota announced earnings in the October-December period that make it likely that its fiscal 2004 net profit will top 1 trillion yen for the second consecutive year.

Toyoda, the 48-year-old grandson of company founder Kiichiro Toyoda, will work alongside seven other executive vice presidents.

Okuda would not talk about whether Akio would move into Toyota’s top job, only saying: “We are a group of human beings, and we need a unifying force. The Toyoda family is our unifying force.”

Watanabe faces an uphill battle in his new job as president. He must lead Toyota in boosting global sales to its target of 8.5 million vehicles in 2006, which would put it almost on par with the world’s largest automaker, General Motors.

“If he makes one false move, it could ruin the company’s future,” said Koji Endo, director of equity research at Credit Suisse First Boston Securities (Japan) Ltd.

Watanabe, 62, is a 40-year Toyota veteran who rose through the ranks working in a variety of fields, including procurement, development and production. But unlike his predecessors, he lacks solid overseas experience, a weakness he acknowledged at the news conference.

But the management shuffle of the firm — seen as the indisputable leader of corporate Japan — also involves factors outside the company.

Okuda said he will relinquish his position as chairman to Cho next year, when Okuda’s second two-year term ends as chairman of the Japan Business Federation (Nippon Keidanren), the country’s most powerful business lobby.

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