uploads/2016/06/tm-pm-5.png

Why Did Toyota Motor Recall Its Vehicles?

By

Updated

Price movement 

Toyota Motor (TM) has a market cap of $158.3 billion. It fell 0.41% to close at $99.85 per share on June 28. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -6.8%, -0.74%, and -18.9%, respectively, on the same day.

TM is trading 4.1% below its 20-day moving average, 3.2% below its 50-day moving average, and 11.5% below its 200-day moving average.

Article continues below advertisement

Related ETF and peers

The Schwab Fundamental International Large Company ETF (FNDF) invests 0.07% of its holdings in Toyota Motor. The ETF tracks an index of large firms from developed markets, ex-US. Its selection and weighting are based on fundamental factors, including sales, cash flow, and dividends/buybacks. The YTD price movement of FNDF was -3.9% on June 28.

The market caps of Toyota Motor’s competitors are as follows:

  • General Motors Company (GM) — $42.7 billion
  • Ford Motor Company (F) — $49.2 billion
  • Tesla Motors (TSLA) — $29.4 billion

The latest news from Toyota Motor

Toyota Motor has recalled 2.87 million cars due to a possible fault in emissions control units. The company also stated, “Evaporative fuel emissions control units in models produced from 2006 to 2015 including the Prius, Auris compact hatchback, and its popular Corolla models were prone to cracks, which could expand over time and lead to fuel leaks.”

It also recalled 1.43 million hybrid Prius and Lexus CT200h cars worldwide due to a possible airbag inflator defect.

Article continues below advertisement

The company also noted, “The recall covers 2010-2012 vehicles with airbag inflators that could have a small crack in a weld, which could lead to the separation of the inflator chambers. The air bad could partially inflate and the inflate could enter the vehicle interior, increasing the risk of injury.”

It added, “The recall vehicle covers 482,000 US vehicles and the air bag inflators involved in this recall were not produced by Takata Corporation.”

Toyota’s sales in May 2016

In May 2016, the company reported total Toyota sales of 219,339 units, a fall of 9.6% from May 2015. The company reported total Toyota division sales of 192,657 units, a fall of 9.5% from May 2015. It reported total Lexus sales of 26,682 units, a fall of 10.1% from May 2015.

Let’s look at sales by type.

  • total reported Toyota car sales of 107,714 units, a fall of 15.9% from May 2015
  • total reported Toyota truck sales of 111,625 units, a fall of 2.5% from May 2015

Next, we’ll discuss Whirlpool.

Advertisement

More From Market Realist