Toyota (TM)
The last two years have been particularly rough for automakers across the board. They were forced to watch sales of their vehicles dwindle to new lows as consumers tried to deal with record unemployment and tight credit conditions. Even the king of automakers, Toyota Motors, had a hard time getting their vehicles off showroom floors across the globe. While the company was trying to wrap its brain around this problem, a new wave of highly-publicized issues threw the company into a battle to save its reputation. Toyota is in the process of rebuilding its foundation in order to reclaim the title that so many automakers strive to have. Will the company’s latest plans be enough to remove some of the tarnish from its reputation?
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Stock Analysis
At one time, it felt like the recalls from Toyota Motors would never come to an end. Every week there was another issue to address with the company’s popular vehicle. Customers’ faith in the automaker started to dwindle as they became more concerned that the vehicles were no longer reliable or safe. Reports that the company tried to conceal the issues with their vehicles only added fuel to the fire. Since that time, Toyota has been going through a number of changes. The automaker rolled out a huge advertising campaign to show customers that their vehicles were still reliable. This coupled with huge incentives did help bring some customers back into Toyota dealerships. The company recently paid a $16.4 million penalty to the U.S. government to pay off its fine for having such a slow response to its sticky gas pedal debacle. Now that the company is slowly putting these problems behind them, it has shifted focus to other promising ventures.
The Japanese automotive giant is teaming up with American electric car upstart Tesla Motors to manufacture a Tesla model S sedan. The Tesla model S sedan is a high performance electric sedan, competing with cars like the BMW 5-series. Toyota will not only be investing $50 million of capital into Tesla but will also provide engineering and production systems for the development of electric vehicles. Toyota definitely has the tools to deliver a powerful electric vehicle, but it does have some catching up to do. Both Nissan and General Motors plan to introduce plug-in EVs in the U.S. before the end of this year. It’s tough to say which company will benefit most from the new partnership. Tesla will receive a creditability boost now that it’s working with Toyota. On the flip side, Toyota will be able to tap into some of the coolness that surrounds Tesla and its vehicles. In addition to this, Toyota Motors will be able to improve its public image in California after it recently shut down the NUMMI factor. The company will reopen the factory because of this new venture.
Toyota will have to continue rolling out various initiatives and incentives to recapture some of the customers that it lost during its recent wave of recalls. The company doesn’t necessarily have to reinvent itself because of its mistakes, but it has to find new ways to get some consumers off the fence.
Other Stuff on Toyota
- Toyota Defends Lexus ES – Toyota officials are coming out against reports alleging trouble in the 2002-2006 Lexus ES.
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