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Why Did Toyota Motor Open a Parts Distribution Center?

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Nov. 20 2020, Updated 12:41 p.m. ET

Price movement

Toyota Motor (TM) has a market cap of $203.3 billion. It fell by 1.4% to close at $118.62 per share on August 26, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -0.84%, 7.1%, and -3.6%, respectively, on the same day. TM is trading 1.7% above its 20-day moving average, 7.9% above its 50-day moving average, and 7.2% above its 200-day moving average.

TM is trading 1.7% above its 20-day moving average, 7.9% above its 50-day moving average, and 7.2% above its 200-day moving average.

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Related ETF and peers

The Schwab Fundamental International Large Company ETF (FNDF) invests 0.07% of its holdings in Toyota. 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 and buybacks. The YTD price movement of FNDF was 4.2% on August 26.

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

  • Ford Motor (F): $49.6 billion
  • General Motors (GM): $49.3 billion

Latest news on Toyota Motor

In a press release on August 26, 2016, Toyota Motor reported, “Toyota Motor Sales, USA, Inc. (TMS) announced that it has officially opened a new parts distribution center (PDC) in Lithia Springs, Georgia. The new Atlanta PDC will employ up to 30 employees in 107,000 square feet of space. Stocking ~43,000 Lexus parts, the facility will serve 27 Lexus dealers in the Southeast, primarily in Atlanta, as well as a five-state area that includes Georgia, North Carolina, South Carolina, Alabama, and Tennessee.”

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It also added that “the Atlanta PDC offers Lexus dealers a way to place a parts order at the end of the business day and have them delivered before the start of business the next morning. The PDC will also offer same-day service in some select areas where dealers can place an order in the late morning and either pick up the part at the PDC or at a centralized meeting point.”

Toyota Motor’s sales in July 2016

In July 2016, Toyota Motor reported total Toyota sales of ~214,000 units, which is a fall of 1.4% from July 2015. It reported total Toyota division sales of 186,000 units, a fall of 0.5% from July 2015. The company reported total Lexus sales of nearly 28,000 units, which a decline of 6.5% from July 2015.

Sales reported by type were as follows:

  • Toyota cars: ~102,000 units, a decline of 8.8% from July 2015
  • Toyota truck: ~112,000 units, a rise of 6.5% over July 2015
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Toyota Motor’s performance in fiscal 1Q17

Toyota Motor reported fiscal 1Q17 total net revenues of 6.6 trillion Japanese yen, a fall of 5.7% from total net revenues of 7.0 trillion yen in fiscal 1Q16. The company’s operating income dropped by 15.1% between fiscal 1Q16 and fiscal 1Q17.

Its net income and EPS (earnings per share) fell to 552.5 billion yen and ~179.1 yen, respectively, in fiscal 1Q17, as compared to 646.4 billion yen and 205.3 yen, respectively, in fiscal 1Q16.

TM’s cash and cash equivalents rose by 11.4%, and its inventories fell by 5.0% between fiscals 4Q16 and 1Q17. Its current ratio and debt-to-equity ratio fell to 1.08x and 1.6x, respectively, in fiscal 1Q17, from 1.13x and 1.7x, respectively, in fiscal 4Q16.

Projections

The company has made the following projections for fiscal 2017:

  • net revenues of 26.0 trillion yen
  • operating income of 1.6 trillion yen
  • net income of 1.5 trillion yen

In the next part of this series, we’ll discuss Herbalife (HLF).

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