The auto industry is one of the biggest industries in which to invest, with some of the industry giants poised to make incredible returns. The auto industry has seen tremendous growth recently and is set to shine by the end of the year, with industry giants looking to improve global operations. Toyota Motor Corporation (ADR) (NYSE:TM), along with General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F), is one of the major players in the industry. Even though the auto industry has seen incredible growth during the past couple of months, a lot of observers believe that the auto industry is yet another bubble that’s about to pop soon.
Auto industry analysis
Overall, the auto industry showed over 5% growth, with an increase in truck sales as a major factor. General Motors witnessed 6% growth in the trucks segment after selling over 53,000 units. The company sold nearly 250,000 vehicles in the period, which showed a growth of 6.4% year-over-year. Ford, after an incredible turnaround story from almost collapsing to being a healthy company, led the trucks market after selling 67,000 trucks last month, showing a 6% growth year-over-year. In terms of total vehicles, Ford witnessed 7% growth after selling nearly 230,000 vehicles in the period. Even though Toyota Motor Corporation (ADR) (NYSE:TM)’s overall growth during the month showed just over 1% increase, Toyota Motor Corporation (ADR) (NYSE:TM)’s Tacoma performed quite well and showed over a 7% increase, compared to the previous year.
Valuation
Toyota Motor Corporation (ADR) (NYSE:TM), with a market cap just under $180 billion, is currently trading around $113. So far, 2013 has been a good year for Toyota, as the company’s share price has seen decent growth. The company’s stock has been growing since reaching the $75 mark last November. Even though Japan has seen some crises recently, and still has several problems, Toyota Motor Corporation (ADR) (NYSE:TM) doesn’t seem to be affected in a major way.
Regarding American companies, General Motors is currently trading around $30 and has a market cap of over $40 billion. General Motors has also seen some growth, compared to last year’s share price of $20. Ford, on the other hand, is trading around $13, with a market cap of $53 billion.
After the bailout of General Motors, and Ford’s turnaround story, both companies have been looking better and healthier, with numerous growth opportunities going forward. Let’s now pay some attention toward the Japanese auto maker, Toyota. Here’s a SWOT analysis of Toyota, which will give investors a better picture of the company and where it stands in the auto segment.
Strengths
One of Toyota’s biggest strengths is its brand name. For decades, the company has been manufacturing quality vehicles, used all over the world. Both General Motors and Ford have improved the quality of their vehicles significantly, which is why they have seen impressive growth in recent years. However, the quality of these American companies wasn’t the best in the early 80’s and 90’s. Toyota, on the other hand, has maintained its brand image over the years. Even though Toyota is a Japanese company, its plants in the U.S adds something more, as consumers have an excuse to ditch good old American manufacturers.
There is no doubt that Toyota is still one of the favorites of consumers, as Toyota’s lineup is durable, reliable and known for its quality. An external strength for the company is the improving economic conditions and consumer confidence. March was perhaps one of the best months that Auto makers saw in recent years and if the conditions continue to improve, the demand is likely to grow, with Toyota being one of the major players to fulfill this demand.
