Toyota Motor Corporation (TM - Free Report) recently announced that its domestic production volume in July is expected to recover and return to 90% of target output, as states continue to ease shelter-in-place strategies and begin reopening processes that were imposed due to the coronavirus outbreak.
Toyota would make 10% fewer vehicles in July than originally planned, as it gradually resumes production following factory closures earlier this year amid coronavirus crisis. In July, the company plans to manufacture 71,000 and 39,000 fewer vehicles worldwide and in Japan than initially planned, respectively. While production has yet to return to normal, July's reduction is lower than 40% production cut in June. It expects the recovery trend to continue in August.
Toyota’s six production lines will be suspended during July for a total of 16 days compared with 25 lines closed for 133 days till June. The firm will stop making its Coaster minibus model for six days, while lines producing the Land Cruiser and Prado SUV models, and the Porte subcompact, will stop for two days. Reportedly, second shifts at some of these plants will remain cancelled until September. Toyota will also cancel some Saturday shifts in July on four lines that produce models including its popular RAV4 SUV crossover model and the Prius gasoline hybrid, many of which are exported overseas.
Moreover, Toyota anticipates a global production drop of 30% from its initial plans for the April-July period, which were made before the virus outbreak and a drop in vehicle demand. Although Toyota halted production at some of its domestic factories from April to June, it will not change its plan to produce at least 3 million cars in Japan in 2020.
To capitalize on accelerated global shift to electric cars, the auto giant is focusing on manufacturing electric and fuel-cell vehicles, which will bolster the company’s product competitiveness. By 2025, it plans to introduce fuel-cell-enabled SUVs, and pick-up and commercial trucks. Additionally, Toyota is working on hydrogen fuel stations in collaboration with various partners. The company aims to generate half of its global sales from electric vehicles by 2025.
Zacks Rank & Other Stocks to Consider
Toyota currently carries a Zacks Rank #5 (Strong Sell). Shares of the company have declined 8.9%, year to date compared with the industry’s fall of 12.3%.
Some better-ranked stocks are Niu Technologies (NIU - Free Report) , AgroFresh Solutions, Inc. (AGFS - Free Report) and AngloGold Ashanti Limited (AU - Free Report) , each carrying a Zack Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Shares of Niu have surged 80.7% year to date compared with industry’s decline of 13.4%.
Shares of AgroFresh have gained 34.1% year to date compared with industry’s rise of 27.4%.
Shares of AngloGold have rallied 23.6% year to date compared with the industry’s rise of 17.5%.
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