Toyota ready to bounce back after difficult 2011
In spite of natural disasters, the automaker forges ahead with its efforts to develop fuel-efficient technologies.
Toyota was able to post a modest 0.4% year-over-year growth in the U.S. last month, while its total year sales declined by around 7%. In comparison, General Motors (GM), Ford (F) and Chrysler posted 13%, 11% and 26% growth, respectively, in the U.S. last year.
As Toyota's inventory continues to recover from shortages after the earthquake, the company expects that increased model availability will help it regain lost U.S. market share. Even though the floods in Thailand have disrupted Toyota's production and sales in other international markets, especially in Asia, the automaker doesn't expect any impact on its North American business.
In spite of the disruptions, Toyota has continued with its efforts to develop fuel-efficient technologies, which will help it compete with similar products launched by rivals over the last year. If nature spares the automaker, we expect that Toyota will be able to grow its U.S. market share in the medium term.
However, Toyota now expects that the yen will remain stronger against the dollar and euro, which will reduce its operating income by 160 billion yen.
Our price estimate of $76 for Toyota's stock is around 10% above the current market price.
Read more about the adverse effect of strong Yen on Toyota's profitability in our previous article, Toyota Hobbled by The Land of the Rising Yen.
I bought a toyota camry because of all the hype about the quality over domestic nameplates. I got tricked by some brainwashed people at consumer driven magazines that never kept a car over three years. What a poor excuse for a car. I went back to my american nameplate cars. Toyota got my last dime.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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