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Toyota (TM) Halts New Harrier SUV Orders Over Output Delays
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Toyota Motor Corp (TM - Free Report) recently announced that it will stop taking further orders for its later mid-size crossover Harrier sports utility vehicle (SUV) model, in the light of output delays brought about by pandemic-linked restrictions in Shanghai and a global semiconductor shortage.
Per media sources, customers have been notified to switch their orders to an improved version of the vehicle that is scheduled to be released in September. Also, Toyota is looking at the possibility of its dealers bearing the difference in price, since the newer model is expensive and likely to cost about 100,000 yen ($733.35) more. However, the automaker has not yet disclosed the price or the upgrades of the new model.
It is probably the first time that an order received by Toyota has been discarded due to an issue on the carmaker’s side.
About 74,000 units of Harrier were sold domestically last year, per reports by the Japan Automobile Dealers Association.
Toyota continues to struggle with the hard-hitting impacts of COVID-19 related lockdowns and the semiconductor shortage that has been throttling the auto industry for a long time now. It faces a strained supply chain and has been forced multiple times to cut back on production or suspend future orders.
The carmaker has slashed its production plan for July amid intensifying supply-chain bottlenecks. It trimmed its global output target for July by 50,000 vehicles. Volumes for July are expected to be around 800,000 units. TM expects the average global output for the July-September period to be around 850,000 units, per month.
Last week, the auto magnate announced yet again that its global production for August would be about 700,000 units, a fall of nearly 18% from its plans at the beginning of the year. Toyota had also said, earlier in the year, that it intends to halt production for the April-June quarter due to global supply-chain challenges. The auto giant brought about a 5.3% cut in vehicle production in May compared to the previous year due to market disruptions. In June too, it stated that a production cut was imminent in the face of extremely tight market conditions. The global production plan for June was brought down to nearly 750,000 units from the original plan of nearly 800,000 units.
Earlier this month, Toyota indefinitely paused all orders for one of Japan’s most popular models, the LandCruiser 300 Series, in the country. The automaker noted that it was challenged with orders exceeding production capacity and the present condition did not allow it to cater to the demand surge.
The Russia-Ukraine war has aggravated the already bleak market conditions by extending the microchip shortage and increasing prices for raw materials. This will continue to keep inventories low. The company is of the view that it would take about six months for the supply chain to revive. Notwithstanding the concerns, the automaker hasn’t lowered its fiscal 2022 global production target of 9.7 million vehicles but has hinted at a possible lowering of the forecast. It is therefore a long wait now for the auto biggie to navigate the headwinds and spring back to normalcy.
Shares of Toyota have lost 11.2% over the past year compared with its industry’s 29.4% decline.
CarParts has an expected earnings growth rate of 35% for the current year. The Zacks Consensus Estimate for current-year earnings has been kept constant in the past 30 days.
CarParts’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. PRTS pulled off a trailing four-quarter earnings surprise of 78.34%, on average. The stock has declined 54.1% over the past year.
American Axle has an expected earnings growth rate of 89.4% for 2023. The Zacks Consensus Estimate for current-year earnings has been revised 1.2% in the past 30 days.
American Axle’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. AXL pulled off a trailing four-quarter earnings surprise of 847.92%, on average. The stock has declined 9.8% in the past year.
Standard Motor has an expected earnings growth rate of 5.2% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 days.
Standard Motor’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 40.34%, on average. The stock has risen 7.5% over the past year.
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Toyota (TM) Halts New Harrier SUV Orders Over Output Delays
Toyota Motor Corp (TM - Free Report) recently announced that it will stop taking further orders for its later mid-size crossover Harrier sports utility vehicle (SUV) model, in the light of output delays brought about by pandemic-linked restrictions in Shanghai and a global semiconductor shortage.
Per media sources, customers have been notified to switch their orders to an improved version of the vehicle that is scheduled to be released in September. Also, Toyota is looking at the possibility of its dealers bearing the difference in price, since the newer model is expensive and likely to cost about 100,000 yen ($733.35) more. However, the automaker has not yet disclosed the price or the upgrades of the new model.
It is probably the first time that an order received by Toyota has been discarded due to an issue on the carmaker’s side.
About 74,000 units of Harrier were sold domestically last year, per reports by the Japan Automobile Dealers Association.
Toyota continues to struggle with the hard-hitting impacts of COVID-19 related lockdowns and the semiconductor shortage that has been throttling the auto industry for a long time now. It faces a strained supply chain and has been forced multiple times to cut back on production or suspend future orders.
The carmaker has slashed its production plan for July amid intensifying supply-chain bottlenecks. It trimmed its global output target for July by 50,000 vehicles. Volumes for July are expected to be around 800,000 units. TM expects the average global output for the July-September period to be around 850,000 units, per month.
Last week, the auto magnate announced yet again that its global production for August would be about 700,000 units, a fall of nearly 18% from its plans at the beginning of the year. Toyota had also said, earlier in the year, that it intends to halt production for the April-June quarter due to global supply-chain challenges. The auto giant brought about a 5.3% cut in vehicle production in May compared to the previous year due to market disruptions. In June too, it stated that a production cut was imminent in the face of extremely tight market conditions. The global production plan for June was brought down to nearly 750,000 units from the original plan of nearly 800,000 units.
Earlier this month, Toyota indefinitely paused all orders for one of Japan’s most popular models, the LandCruiser 300 Series, in the country. The automaker noted that it was challenged with orders exceeding production capacity and the present condition did not allow it to cater to the demand surge.
The Russia-Ukraine war has aggravated the already bleak market conditions by extending the microchip shortage and increasing prices for raw materials. This will continue to keep inventories low. The company is of the view that it would take about six months for the supply chain to revive. Notwithstanding the concerns, the automaker hasn’t lowered its fiscal 2022 global production target of 9.7 million vehicles but has hinted at a possible lowering of the forecast. It is therefore a long wait now for the auto biggie to navigate the headwinds and spring back to normalcy.
Shares of Toyota have lost 11.2% over the past year compared with its industry’s 29.4% decline.
Image Source: Zacks Investment Research
Zacks Rank Key Picks
TM carries a Zacks Rank #3 (Hold), currently.
Better-ranked players in the auto space include CarParts.com (PRTS - Free Report) , American Axle & Manufacturing Holdings (AXL - Free Report) and Standard Motor Products (SMP - Free Report) , each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
CarParts has an expected earnings growth rate of 35% for the current year. The Zacks Consensus Estimate for current-year earnings has been kept constant in the past 30 days.
CarParts’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. PRTS pulled off a trailing four-quarter earnings surprise of 78.34%, on average. The stock has declined 54.1% over the past year.
American Axle has an expected earnings growth rate of 89.4% for 2023. The Zacks Consensus Estimate for current-year earnings has been revised 1.2% in the past 30 days.
American Axle’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. AXL pulled off a trailing four-quarter earnings surprise of 847.92%, on average. The stock has declined 9.8% in the past year.
Standard Motor has an expected earnings growth rate of 5.2% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 days.
Standard Motor’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 40.34%, on average. The stock has risen 7.5% over the past year.