FUJHY - Toyota Faces A Turbulent Time With Key Decisions Looming

2024-06-21 07:25:25 ET

Summary

• Toyota, the world’s leading car company, has had a turbulent start to 2024.
• Toyota is confronting certification irregularities on a number of its models and seems focused on not concerning its customers.
• Toyota plans to continue with the Internal Combustion Engine by using marginal improvements in shape and energy efficiency at a time when the BEV is taking over the industry.
• Toyota has partnered with BYD in developing a BEV for the Chinese market and is adopting BYD's PHEV platform and blade batteries for new PHEV developments.
• Toyota’s major focus on conventional hybrid technology is not consistent with where the auto industry is moving. This is worth considering when thinking about investment in Toyota.

We live in a turbulent world with lots of change. Being the world’s number 1 carmaker has not made Toyota ( OTCPK:TOYOF ) ( TM ) immune to tricky times, and 2024 has been a roller coaster tide. There have been obvious setbacks this year, with data rigging scandals and unhappiness about the independence of the board. I address here where I think Toyota sits in the middle of this turbulence. For me, the big one is that Toyota very recently announced that the ICE era isn’t over and Toyota, Mazda ( OTCPK:MZDAF ) and Subaru ( OTCPK:FUJHF ) are doubling down on improving the ICE. This alone is grounds for investors to pay attention, as it represents a “Kodak” moment for Toyota. Toyota made a big statement about electrification with the Prius (released in 1997 Japan; 2000 US), but today Toyota is the company seen to be leading attempts to stave off the electrification of transport.

Toyota’s certification irregularities, Is Toyota OK?

It started with issues concerning Toyota’s partnered activities with Daihatsu and Hino. Daihatsu was found to have manipulated safety tests on a range of their vehicles, while the Hino issue revolved around falsified emissions data involving 600,000 vehicles....

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