While we just found out about General Motors’ (GM) sales rise, we also got word about Toyota Motor’s (TM) sales as well. And it turns out that Toyota got a similar boost as well, up 3.7% against this time last year. Investors were at least modestly pleased, as they sent shares of Toyota up modestly in Friday afternoon’s trading.
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Much of the gain, noted a report from Reuters, came from rising demand for Toyota’s line of hybrid vehicles. Though this demand may come with a bit of a double edge to it, as another report noted. This is particularly true in Australia, where a new vehicle law recently kicked in.
Called the New Vehicle Efficiency Standard (NVES), it looks to “incentivise” manufactures to offer vehicles that use less gas in a standard drive. This is good news for hybrid vehicles, but even with hybrids’ improved fuel efficiency, may not prove to be enough. Car companies will have a set target for carbon dioxide emissions, noted the report, but failing to meet that target will come with costs. Thus, noted CarExpert.com.au’s Paul Maric, some vehicles will likely increase significantly in price as a result.
A Loss in Reliability
Meanwhile, Toyota also took a hit in reliability, according to word from Team BHP. Where previously, Toyota was on top of a Consumer Reports list for reliability, it has now dropped to third behind Subaru and Lexus. But given that Lexus is a sub-brand of Toyota, the reports note, the end result is still a decent showing as Toyota is now essentially second and third.
And the measures were actually pretty close. While Subaru scored an average of 68 out of 100, Lexus came in at 65. Toyota, for its part, posted a 62. One of the biggest reasons Subaru pulled out ahead was that Subaru cars tend to share components across different models. This in turn allows Subaru to keep many basic systems in place from one model to another, and in turn “…reduce…the risk of new problems.”
Is Toyota Motor a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TM stock based on one Buy and one Hold assigned in the past three months, as indicated by the graphic below. After an 6.59% rally in its share price over the past year, none of the remaining analysts have price targets available, thus leaving no downside risk or upside potential available.
