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Toyota Motor Corporation (TM - Analyst Report) is reconsidering its investment of up to 20 billion baht ($609 million) in Thailand owing to the ongoing political turmoil in the nation, according to Reuters. If the unfavorable situation persists, the automaker may even reduce its investment.

Toyota is one of the largest automaker in Thailand and produced about 850,000 vehicles in the country in 2013. Roughly 445,000 were sold domestically and around 430,000 vehicles were exported. Toyota plans to sell 400,000 cars locally and export 445,000 vehicles in 2014. Toyota also intends to increase its annual production capacity by 200,000 vehicles over the next three to four years. However, due to the political unrest the plan seems far fetched.

Thailand is the biggest auto market in Southeast Asia and regional vehicle production and export base for the automakers. Other than Toyota, Honda Motor Co., Ltd. (HMC - Analyst Report), General Motors Company (GM - Analyst Report) and Ford Motor Co. (F - Analyst Report) also operate in the country.

However, the anti-government activities in Thailand have significantly affected the economy. It has also led to several casualties in the region.

Political unrest has also adversely affected Thailand’s stock index. Toyota expects the economic damages to spread to other Asian economies. Auto sales in Thailand are anticipated to decline 13.6% to 1.15 million vehicles in 2014. The decrease will mainly be driven by sluggish demand and slow economic growth.

Toyota posted earnings per share of ¥138.26 ($1.40) in second-quarter fiscal 2014 (ended Sep 30, 2013), reflecting a 69.8% year-over-year surge. The company gained heavily from higher revenues, favorable currency translation and strong cost-control measures. Consolidated revenues in the quarter escalated 16.2% year over year to ¥6,282.2 billion.

Toyota currently carries a Zacks Rank #3 (Hold).

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