Toyota's International Sales Growing as the Supply Chain Recovers


Toyota Motor Corporation ( TM ) was hard hit by the tragic Japan earthquake and tsunami. In spite of these challenges, Toyota managed to increase its vehicle sales in Q1 in international markets by 8% (year-over-year). Toyota's international vehicles sales account for around 42% of its global vehicle sales and sells its vehicles mainly under three brands: Toyota, Lexus and Scion. The company globally with automakers like BMW (GR:BMW), GM ( GM ), Ford ( F ), Honda ( HMC ), Daimler (ETR:DAI) and others. Below we look at some of the ingredients to Toyota's success internationally.

We have a price estimate of near $94 for Toyota stock, which is about 15% ahead of the current market price.

Localized decision making

Toyota is focusing on decentralizing its decision making structure. A decentralized structure will help Toyota to quickly reflect customer feedback in its R&D, production and sales operations and make quick decisions regionally - closest to its customers. We believe that this will help Toyota stay nimble in responding to customer demand in its global markets and capitalize quickly on sales opportunities in fast growing emerging countries and other international markets. This can help increase Toyota's market share in international automobile markets over the mid to long-term.

Auto parts supply chain almost fully recovered

Many vehicles sold in Asia depend on parts supplied by companies from northeast Japan, many of which were affected by the Japan earthquake. This disruption in auto parts supplies initially affected Toyota's production capacity in its international markets especially in Asia. However many of these Japanese supplies are back up and running and production levels could reach last pre-quake levels as early as July.

We believe that the recent setback will partially moderate its international vehicles sales growth in the short-term while Toyota works towards reestablishing its supply chains.

You can drag the trend lines in the  modifiable charts above to see the impact of these trends on Toyota's stock value.

See our full analysis and price estimate for Toyota stock .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: F , GM , HMC , TM



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