I found an interesting slideshow over on U.S. News & World Report that takes a look at the cars that have been hurt the most by the recession. I was not surprised to see the likes of Chrysler, Dodge, Saturn, and Chevrolet on the list -- these brands have a good deal of problems. However, I was very surprised to see Toyota (TM) included in the list. This is Toyota folks, the car company that all car companies should emulate - right? Wrong. It appears that the car giant didn't expect the Toyota Tundra pickup to drag on sales as much as it has, which has dragged sales down. If there is one thing that American automakers know how to do, it is to build big, gas-sucking, diesel-belching, trucks. So don't tread in our realm, Toyota!In addition, Toyota has not discounted prices as much as its rivals. While this practice has helped the firm protect its profits, it hasn't helped the automaker grow said profits. I was also rather surprised to see Toyota's Scion division on the list. Perhaps it is just around these parts, but I see a pretty good amount of Scions on the road. The article does note that the Scion is losing the battle against the Honda Fit and the Mazda3, which have "more mainstream appeal."
So, a couple of the company's cars aren't weathering the recession well, how is the stock doing? Turns out that Toyota is struggling as well. The shares are trying to fight their way higher from the $75 region, but the road is going to be bumpy. The stock faces immediate overhead resistance from its 10-month moving average, which has pushed the automaker lower since the middle of 2007. Should Toyota power through this trendline, it faces potential resistance in the form of the $81 level. This level has capped the shares in the past, and could serve to fill this role again. Furthermore, the stock's 10- and 20-week moving averages could provide resistance. These trendlines have combined with their 50-week counterpart to stifle the shares.
With the current economic struggles, Toyota's road to profit will definitely be bumpy.
Six top trades for the rest of 2009
Comfort Zone Investing: Buffett buys Burlington
Senator Sanders proposes legislation to break up large banks
Reader Comments (Page 1 of 1)
7-16-2009 @ 4:52PM
sgentilejr said...
Toyota sales are DOWN across the board worldwide by 30+ percent. Toyota has already asked the Japanese government to back their loans and or lend them money. Toyota has already closed factories and stopped construction on new factories around the globe.
Regardless of brand, make or model it all comes down to just one thing "Consumers with empty pockets and far too much debt already cannot afford new vehicles" no matter how well they might be made or how many miles per gallon the new vehicle gets..
7-29-2009 @ 8:56AM
ken said...
sgentilejr I could not have said it any better than that !!!! How true that is. I got a sweet deal on a Lexus Lx 470 back in 2003 The Truck was still worth over $35,000 I picked it up for $9000 from a private owner and it was in pristine condition. People thought it was new. Now with the gas price's I would like to get rid of it But can't sell it for close to what it is worth still nor can I trade it in and get a good deal on something that gets good or better gas mileage than this truck gets so I either pay for the gas or I get a hefty car payment every month and the Insurance on a small car or small suv is almost double what I pay on the Lexus. I still cannot see how the 1994 jeep grand Cherokee up country that I had before the Lx 470 is double the amount I pay for the Lexus Lx 470's insurance a year I pay $970 a year on the Lexus and was paying $2128 a year on the Jeep for full coverage I cannot under stand this the Lexus is an 1999 the jeep is a 1994 why was the insurance so much more for the Jeep ? so either I pay for the insurance and car payment and or I pay the high price for gas. YOU JUST CANT WIN.