Tyota [7203.T] The stock price is in motion. The stock reached new heights this month after the manufacturer set records for December 2021. In the process, the Aichi-based automaker overtook General Motors as the largest automaker in the United States last year.
More fuel for Toyota shares is news that it plans to develop a new program, which could introduce Toyota to the autonomous driving market.
What happens to Toyota stock?
Toyota stock has gained 3% so far in 2022, to close Jan. 11 at 2,322 yen. GM [GM], on the other hand, growth slowed by 0.47% over the same stretch, while Volkswagen [VOW.3] It is traded steadily throughout the year.
Over the 12-month period, Toyota’s stock also outperformed its competitors, up 46%, outpacing GM’s 41% gain and ahead of VW by 28.2%.
How Toyota shares outperformed its competitors?
Toyota’s stock has benefited from strong sales and inventory management during the ongoing semiconductor shortage.
Toyota Motor North America moved 174,115 vehicles in December. While that was a 30.2% decline on a volume basis from last year, it moved 2021 sales to 2.33 million, a 10% year-over-year increase. Electric vehicle sales totaled 83,697, up 73.2% from 2021, and representing about a quarter of total volume.
December electrified vehicle sales for Toyota vehicles increased 73.2% from 2021
This impressive performance made the US auto manufacturer the best-selling automaker in 2021. Zacks Equity Research notes that this is the calendar year in which a foreign automaker outperformed its competitors in Detroit in the US. In fact, since the Great Depression, General Motors has taken the lead.
Despite the success of Toyota’s Jack Hollis in North America, he said the automaker would not consider the result “so sustainable that it can maintain sales in the US and has no plans to use the 2021 achievement for any kind of advertising.”
When the semiconductor shortage started, the automaker had a stockpile of chips which meant it could continue production for longer than competitors. Zacks Equity Research Cox Automotive analyst Michael Krebs is quoted as saying:
“Toyota’s success comes from managing tight inventory well throughout the year. It achieved solid sales in its Toyota brand as well as its luxury Lexus brand. Toyota hoarded computer chips, which helped it avoid some of the production risks that early Detroit 3 hit with a chip shortage. .”
“Toyota’s success comes from managing tight inventory well throughout the year. It achieved solid sales in its Toyota brand as well as its luxury Lexus brand. Toyota hoarded computer chips, which helped it avoid some of the production risks that early Detroit 3 hit with a chip shortage. — Cox Automotive Analyst Michael Krebs
The electric future of Toyota stock
The switch to electric cars will bolster Toyota’s stock over the next decade. Toyota aims to sell more than 3.5 million electric vehicles worldwide each year by 2030, although it did not say what percentage of total sales this number represented. To give an idea of how important electric cars are, Toyota increased the target by 75% in mid-December. By the end of this decade, the car manufacturer aims to offer at least 30 battery models in the passenger and commercial sectors.
Using electricity costs money, so expect this investment to be chosen for future profits. Overall, the automaker is investing $35 billion in battery electric vehicles, with $3 billion being pumped into its U.S. operations, including building a new battery production facility in North Carolina that specializes in lithium-ion batteries.
Software platforms may conjure images of personal computers, but software used in cars is becoming an increasingly important – and profitable part – of selling and owning a car. Stilants [STLA] – Maker of Fiat and Dodge, among others – Partnership with Amazon [AMZN], Volkswagen [VOW.3] Tesla is developing its own ‘vw.os’ system, while Tesla is marketing its cars based on the ability to play AAA video games like The Witcher 3 on car screens.
Not to be outdone, Toyota is developing its own platform, Arene, to go live in 2025, according to reports. Nikki. The platform will handle everything from a vehicle’s location in traffic to self-driving. According to the report, Toyota is also looking into a licensing model to make the platform available to other companies working in the electric vehicle space.
What Analysts Think
Shinji Kakiuchi of Morgan Stanley initiated Toyota’s coverage with an Overweight rating and a 2,300 yen price target on the Japanese company’s listed shares. Kakiuchi noted that Toyota’s battery sales are low compared to its competitors, but plans could accelerate as consumer needs change.
Among the analysts who track stocks on Yahoo Finance, Toyota’s share price has a target price of 2,392.00 yen – and reaching that would result in a 3% rise at Tuesday’s close.
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