Toyota Motor Corporation
) is reconsidering its investment of up to 20 billion baht ($609
million) in Thailand owing to the ongoing political turmoil in
the nation, according to Reuters. If the unfavorable situation
persists, the automaker may even reduce its investment.
Toyota is one of the largest automaker in Thailand and produced
about 850,000 vehicles in the country in 2013. Roughly 445,000
were sold domestically and around 430,000 vehicles were exported.
Toyota plans to sell 400,000 cars locally and export 445,000
vehicles in 2014. Toyota also intends to increase its annual
production capacity by 200,000 vehicles over the next three to
four years. However, due to the political unrest the plan seems
Thailand is the biggest auto market in Southeast Asia and
regional vehicle production and export base for the automakers.
Other than Toyota,
Honda Motor Co., Ltd.
General Motors Company
Ford Motor Co.
) also operate in the country.
However, the anti-government activities in Thailand have
significantly affected the economy. It has also led to several
casualties in the region.
Political unrest has also adversely affected Thailand's stock
index. Toyota expects the economic damages to spread to other
Asian economies. Auto sales in Thailand are anticipated to
decline 13.6% to 1.15 million vehicles in 2014. The decrease will
mainly be driven by sluggish demand and slow economic growth.
Toyota posted earnings per share of ¥138.26 ($1.40) in
second-quarter fiscal 2014 (ended Sep 30, 2013), reflecting a
69.8% year-over-year surge. The company gained heavily from
higher revenues, favorable currency translation and strong
cost-control measures. Consolidated revenues in the quarter
escalated 16.2% year over year to ¥6,282.2 billion.
Toyota currently carries a Zacks Rank #3 (Hold).
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