It’s No Party Time for Toyota Motor Corporation (TM)!

The bigger challenge – Europe

The impact of this news on the stock has not been alarming, but it has to be kept in mind that this is just not the time for a PR faux pas. The investors have already factored in growth in the US market. It is almost expected that the automakers will beat analyst estimates here. And Ford Motor Company (NYSE:F), GM, Toyota have all lived up to expectations posting sales growth in the US well ahead of Wall Street estimates. GM has reported a 16% increase in units sold, Ford 22%, and Toyota 27%. So now the investor eye is on the ability of the players to stand up to greater challenges at hand like Europe for example. In 2012 a Japanese car maker made history by featuring in the full year top ten – being the first automaker from Japan to do so. And no it was not Toyota! It was the Nissan  Qashqai which moved into the 8^th slot being the only car among the top ten to avoid a sales drop.

Again no mean feat where Europe’s choicest car brand Volkswagen posted declines in units sold for all its bestselling cars. Sale of VW Golf was down 11%, VW Polo 20%, and VW Passat 10%. Ford and General Motors both posted double digit declines for popular models like Ford Fiesta, Ford Focus, Opel Corsa, Opel Astra, etc. While Ford is assuring investors that it will break even in Europe by 2015 leveraging the restructuring plan along the lines of the US, GM has got former VW Manager Neumann as its new Opel Chief to achieve a turnaround. It is about time that Toyota too chalked out a strategy for Europe.

Setback in China

The company has to improve its performance in China as well. The boycott of Japanese cars in China has already allowed the likes of Ford, GM, VW to gain further inroads. Toyota’s sales were almost 25% below expectations while the Ford Focus posted a 57% increase, meanwhile Chevrolet Sail and VW Passat both gained 41%. Now that sales of Japanese cars are improving, Toyota has a clear task at hand here.

Net-net, the expectation from Toyota would be to provide concrete news about its outlook for Asia or a game plan for Europe. The resurfacing of the recall saga once again dampens investor enthusiasm to say the least.

The article It’s No Party Time for Toyota! originally appeared on Fool.com and is written by Tina De.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.