Toyota shares: Price analysis before buying or selling

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ISIN code: US8923313071

Ticker: TYO: 7203

Index or market: NYSE

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Elements to consider before selling or buying Toyota shares

Analysis N°1

Worldwide car market figures and news are important here. And we’re all about that! We'll be carefully following new launch opportunities along with new Toyota vehicle ranges.

Analysis N°2

We’ll also continue to follow Toyota's progress on the hybrid vehicle market since the Japanese could become the international leader in this segment and thereby gain in profitability.

Analysis N°3

As far as Toyota's international expansion possibilities is concerned, we will of course follow the development of its distribution and service network which will help it break into various markets.

Analysis N°4

Data from competitors is also to be taken into account. We'll be following the evolution of market shares of each of the major players in the global automotive sector and significant events such as the release of new vehicles and other announcements with the greatest attention.

Analysis N°5

Finally, given that the Toyota group operates internationally, closely monitoring the level of global growth and the possible crises and recessions that will impact its sales is essential.

Analysis before buying or selling Toyota shares

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General presentation of Toyota

In order to perform a good analysis of the Toyota share price, you must of course know the company inside out, as well as its main activities and sources of income. Indeed, it is essential to know how the group achieves its turnover in order to understand how its growth may evolve in the more or less long term. Here is a complete presentation of the Toyota company and its activities and sources of revenue:

The Toyota Motor Corporation group is a Japanese group that operates in the field of automobile manufacturing. More specifically, the group is currently one of the world's leading car manufacturers.

In order to better understand the activities carried out by this company, however, it is possible to divide them into different divisions according to the share of turnover they generate and in this way:

The sale of vehicles represents the major part of the activities of this group with more than 90.4% of the company's turnover. In 2020/2021, the group sold more than 7.646 million vehicles under various brands, including the Toyota brand, but also the Lexus, Hino and Daihatsu brands.
Financial services represent 7.8% of Toyota's turnover and mainly concern the financing of vehicle purchases.
Finally, the rest of the group's turnover comes from ancillary activities.

It is also interesting to know the geographical distribution of the Toyota group's revenues. More than 31.6% of its turnover is currently generated in Japan. The rest comes from Asia (16.7%), North America (34.3%), Europe (10.9%) and the rest of the world (6.5%). The company currently employs 366,283 people and its production takes place mainly in Japan, although it also has production centres in other countries.

Photo credits: Mike Mozart - Flickr

The major competitors of Toyota

Knowing the competitive environment of the Toyota group is essential to understand how this value may behave in the future because its competitors may have an influence on its market share. Here is a presentation of the players in this sector in direct competition with it.

BMW

First of all, we will of course follow the German automobile group BMW which was created in 1916 by Gustav Otto and Karl Friedrich Rapp. Today it is based in Munich in Bavaria. The group sells vehicles through several brands such as BMW, Mini and Rolls Royce as well as motorbikes under the BMW brand.

Mercedes-Benz

Another major competitor to Toyota is the Mercedes-Benz Group, which is a German car manufacturer with premium, sports and luxury models, trucks, coaches and buses. This independent company was founded in 1926 by three other manufacturers with Daimler-Motoren-Gesellschaft, Mercedes and Benz & Cie.

Honda Motor Co

Also among Toyota's major rivals is Honda Motor Co Ltd, more commonly known as Honda, which makes motorbikes, quads, scooters, business aircraft, electric generators, boat engines and garden equipment, as well as cars. The group sells tens of millions of four-stroke engines and is the world's largest producer.

Nissan Motor Company

The Nissan group, a Japanese car manufacturer formerly known as Datsun and based in Yokohama, will also be followed closely. This group has also been linked to the French group Renault since 1999 through the Renault-Nissan Alliance, which is one of the largest automotive groups in the world in terms of the number of vehicles produced. Nissan owns 15% of the Renault group and Renault owns 43.4% of the Nissan group.

General Motors

The competition from General Motors Group, also known as GM, an American car manufacturer based in Detroit, Michigan, USA, will also be closely watched. Once the owner of more than 15 car brands, it was founded in 1908 by William Crapo Durant and was the largest car manufacturer between 1931 and 2005 and in 2011.

Stellantis

Finally, the last major competitor to Toyota is the Stellantis Group. This company is a multinational automotive group created in January 2021 and is the result of the merger between the PSA and Fiat Chrysler Automobiles groups. As a result, the Stellantis group now operates and markets more than 14 vehicle brands, with five brands from the PSA group, including Citroën, DS Automobiles, Opel, Peugeot and Vauxhall, and nine brands from Fiat Chrysler, including Abart, Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati and RAM.

The major partners of Toyota

Here are the current main Toyota partners and details of their agreements.

PSA

Since 2005, the Toyota group has been partners with PSA, one of its French competitors, with which it has pooled the production of certain vehicles and parts, particularly regarding superminis or B-segment cars.

Microsoft

In 2016, Toyota also signed a partnership with the Microsoft group , with which it works closely on connected car projects and data-based solutions.

Suzuki Motor

The same year, Toyota mentioned a close partnership with the Suzuki Motor group as part of a cooperation which would allow the two companies to better adapt to the technological challenges facing them and the Global automotive industry.

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The factors in favour of a rise in the Toyota share price:

Firstly, the Toyota group enjoys an advantage over some of its competitors thanks to the wide range of vehicles it offers on the market. By offering vehicles of all types and with varying price ranges, the Toyota group is thus able to reach a large proportion of consumers and thus multiply its sales by reaching the different segments of the market.

Another asset of the Toyota Group is its seniority. Indeed, the Japanese group is undoubtedly one of the oldest groups in the automotive market in the world. Thanks to this seniority, Toyota benefits from a strong experience and a real know-how in this field but also from a great notoriety.

We can of course also speak here of the Toyota company's workforce as one of its important assets. Indeed, the group currently has more than 310,000 employees worldwide, enabling it to respond more effectively to demand.

Toyota is also an innovative group and a pioneer in specific segments such as the hybrid technology segment. Moreover, in these segments, in addition to being one step ahead of its competitors, Toyota is known as a high-quality manufacturer.

This pioneering position and innovative image of Toyota is no accident. Indeed, the group has very significant research and development capabilities and is able to invest heavily in this area with world-renowned advanced engineering.

Toyota's presence on the international market is also another asset thanks to its notoriety and Japan's ability to export its products to both Europe and the American continent. In addition, the Toyota group is also relying heavily on the relocation of its production to countries such as France to reach its target markets more easily.

Finally, Toyota's communication and marketing strategy is also very qualitative with a strong presence in all media and in major sporting events for which the brand is often a sponsor.

The factors in favour of a drop in the Toyota share price:

Firstly, although Toyota is of course one of the largest car manufacturers in the world, it still competes with many other companies internationally, including several European and American groups. As a result of this very strong competition, the possibilities for increasing its market shares remain limited and Toyota has to pay particular attention to its positioning in order to remain competitive while being highly innovative.

Finally, another major shortcoming of the Toyota group concerns the specific features of the vehicles produced by this company. Indeed, the fact that Toyota's customers are offered more options than most of its competitors, who prefer to offer better equipped vehicles at the entry level, is a weak point which is likely to cause Toyota to lose part of the market.

As you can see, Toyota's shortcomings are in fact very few in number and are limited to two major weak points. However, you should not overlook these weaknesses as they can have a very strong direct impact on the price of this asset.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Who are the largest shareholders in the Toyota Group today?

The capital of the Toyota Motors group is divided between the free float, the group's own 15.3% and Toyota Industries Corporation's 7.31%. The rest is owned by large shareholders including Nippon Life Insurance with 3.9%, DENSO Corporation with 2.76%, Nomura Asset Management with 2.26%, The Vanguard Group with 1.92%, MS&AD Insurance Group Holding with 1.84%, Tokio Marine Holding with 1.56%, Mitsubishi UFJ Financial Group with 1.24% and Sumimoto Mitsui Financial Group with 1.15%.

What are the divisions and subsidiaries operated by Toyota?

The Toyota Motors Group operates and owns various divisions and subsidiaries through which it achieves its sales, including Lexus, Daihatsu, Scion in Canada and the United States, Hino TRucks for trucks and buses, Denso as an OEM, Gazoo Racing, Aisin Seiki in equipment, Subaru Corporation, KDDI Corporation as a telecommunications operator and Koyo Seiko Co.

How to technically analyse the Toyota share price?

Technical analysis of the Toyota share price involves the use of charts adapted in terms of periodicity but also the use of various technical indicators of trend or volatility such as the MACD, moving averages, stochastics, RSI as well as pivot points and support and resistance levels.

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Analysis before buying or selling Toyota shares