toyota pedal recall financial analysis
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Toyota Motor Company is the world's largest vehicle manufacturer based on sales and production volume. The company saw annual increases in net income from FY 00 to FY 08, expanding from 482 billion Japanese yen to a record 1.7 trillion yen in FY 08. In FY 09, with weaker developed markets, a stronger yen and higher raw material and commodity costs, it posted its first operating loss in 71 years. Despite lower sales, and costs related to product the recalls, Toyota Motor Company returned to profitability in FY 10. It is usually the most profitable automotive company based on net income. In 2008, Toyota became the world's largest vehicle seller by volume. It had become the largest volume producer in 2007. The March 2011 earthquake in Japan, combined with the tsunami and nuclear plant issues disrupted production of automakers and suppliers based in Japan. Toyota noted related costs of about JPY320 billion yen. The 2011 flood in Thailand reduced Toyota's production and revenues, but not as much as the earthquake. Due mainly to the twin Asian crises in 2011, Toyota lost its global sales and production edge in that year. However, Toyota regained the leadership mantle in 2012, and global demand should rise in 2013. In U.S. operations, Toyota’s new light vehicle production is expected to rise 6.6% to 15.4 million units. Rising prosperity in emerging markets, led by China, should drive global demand growth, partly offset by weak European demand. Thus higher production is expected in Asia. Market Tension In China, Toyota sales fell 4.9% to 840,500 vehicles last year, the first annual drop based on company figures stretching back to 2002. Sales of Japanese cars in China were affected after tensions escalated over ownership of uninhabited islands known as Diaoyu in Chinese and Senkaku in Japanese. LMC predicts the Japanese will see no growth in China this year, while the country’s auto market will expand 10%. Toyota doesn’t expect deliveries in the country to reach pre-protest levels before this autumn. Adding to tension, the yen's drop has decreased trade between the world's second- and third-largest economies. Gao Xiqing, president of China Investment Corp., in an interview with The Wall Street Journal, signaled growing concern about the impact on the Chinese economy due to a wave of more-aggressive easing under Japanese Prime Minister Shinzo Abe, which Abe says is aimed at ending persistent deflation. Mr. Gao's remarks reflect concerns in emerging markets that efforts by the U.S., Europe and Japan to spark growth could devolve into a currency war. Japan is the second largest economy in the world, with a total GDP of around $4.38 trillion dollars. This is larger than Germany, China, the UK and France. In Japan, Toyota shares have climbed 40 percent this year in Nikkei 225 Stock Average. Follow our Blog at: http://planninglogic.wordpress.com/TRANSCRIPT
Toyota’s Financial AnalysisA Comparative Analysis
ByAlixandra Porembski
Planning Logic
Toyota Motor Corp.
Toyota at a Glance
FY 09• posted first operating loss in 71
years. • weaker developed markets,
stronger yen and higher raw material and commodity costs.
FY 10 • Despite costs related to
product the recalls, return to profitability.
Market Capitalization: 7,933B
Price / Earnings: 18.9 vs. 31.39
Net Profit Margin (mrq): 1.8% vs. 1.98%
Price To Free Cash Flow (mrq):
-8.5
Return on Equity: 5.0% vs. 3.7%
Total Debt / Equity: 133.8
Dividend Yield: 1.7%
Industry Statistics
Toyota Motor Corp: NYSE
Index Level Performance (as of 02-May-2013)
Peer Group: NYSE
U.S. Market Share for the Top Five Automakers
Carmaker 2011 2010 2009 2008 GM 19.4% 18.8% 19.7% 22.1%FORD 16.5% 16.4% 15.3% 14.2% TOYOTA 12.6% 15.2% 17.0% 16.7% CHRYSLER 10.5% 9.2% 8.8% 10.8% HONDA 9.7% 10.6% 11.1% 10.8%
Market share figures for 2008 to '11 are for the full 12 months. The shares for CY11 cover the first 10 months.
Nikkei 225 Stock Performance
• March 2011 major earthquake and Tsunami in Japan.• Toyota noted related costs of about JPY320 billion yen.
http://live.wsj.com/video/how-betting-against-the-yen-paid-off/748B9A48-D09F-46B5-91DB-BAAFCAF50571.html#!748B9A48-D09F-46B5-91DB-BAAFCAF50571
A weaker yen strengthens exporters backbone of the
Japanese economy
The yen has fallen roughly 15% vs. the greenback
Efforts by the U.S., Europe and Japan to spark growth could devolve into a currency war. Devaluing currencies for
economic advantage.
Japanese not likely to see growth in China, though the auto market will expand 10%
Toyota
Sales fell 4.9%
Nissan Motor Co.
Honda Motor Co.
declined thanks to the anti-Japan sentiment.
Ford Motor Co.
deliveries jumped 54%
General Motors Co.
15.1% market share
Volkswagen
sold 4 of top 10 selling cars
recalled a record number of vehicles with defective gearboxes
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