Tuesday Ticker: February 11, 2019

Toyota’s Triumph

After a quarterly report revealed that Toyota earned $8.4 billion—well over the $6.93 billion predicted by industry analysts—the Japanese manufacuter has seen its stock price tick up by 4.4 percent.

The Q4 earnings were, in fact, about 3.3 percent lower than in 2018, but 21 percent higher the consensus predictions of analysts—$6.93 billion.

A strong January for Toyota also helped bolster investor confidence.

On a micro level, the performance of Toyota Canada might help paint a picture about why the OEM has performed so well.

In Canada, the company’s monthly sales report paints a snapshot of the reasons for Toyota’s success. Toyota Canada sold 1,728 hybrid electric and plug-in hybrid electric vehicles in January, 30.5 percent more than in January of 2019. Hybrid sales—just 1,001 units—were up by 360 percent over the same period.

Interestingly, last week, Toyota, along with Nissan, broke from other OEMs by not announcing an end to its monthly sales reports.

Sales of the plug-in hybrid electric models were also up, thanks, in part, to the made-in-Canada Toyota RAV 4 hybrid. In January 2020, it sold 534 units, up 38 percent over the previous January.

Prius Primes also contributed to the overall increase in hybrid popularity. In January 2020, 437 units were sold, 3.6 times more than in January 2020.

These figures will have investors salivating. Because, as a percentage of overall sales, EV and hybrids remain relatively low and expected to eclipse all other segments of the market within 20 years, Toyota’s performance appears to hold both the promise of future growth and strong short-term performance.

 

BUKL-Up, YouTube

After doubling the number of auto maintenance facility business partners in less than six months, GTA-based app BUKL has started a digital marketing campaign on YouTube.

In its advertisements, viewers are encouraged to download the app, which aims to take the stress out of servicing cars, provides a platform for maintenance shops to bid on providing services.

Since its launch in September, numerous businesses have joined the platform, including auto repair facilities—though, it appears its partner collision-based businesses can offer only diagnostic services through the app, on top of regular maintenance services.

Currently, the app has partner businesses across much of the GTA—including Ajax, Brampton, Burlington, Concord, Toronto, Mississagua, Richmond Hill, Vaughan, Whitby and Thornhill.

The app has also reached formal agreements with Midas, AC Delco, Bosch and Active Green + Ross.

As a privately owned business, no information on the company’s value exists. One metric which may provide some indication of its strength comes from the rate of growth of in the number of partner businesses.

At its launch, in August, the app boasted having just over 100 partner businesses. Today, its web page lists more than 200.

 

General Decline

In the last quarter of 2019, General Motors lost almost $200 million US ($250 million Canadian), in part because of the UAW strike.

Its total earnings for the year were $6.7 billion US ($8.9 billion Canadian). This is a seven percent drop from the previous year.

The strike—which began in September—may have cut $8.2 billion out of company profits—about 20 percent of its total.

Soft sales internationally were also a factor, with Chinese consumers turning away from the brand.

Despite the dismal numbers, investors appear confident in GM’s ability to succeed. Its executive team has made several EV-related announcements.

Analysts say are aimed at reminding investors that, while Tesla’s stock may have ballooned over the past six months, GM is about to enter the EV game in a more significant way.

At a Capital Markets Day presentation, GM president Mark Reuss indicated the Hummer EV may become the first EV on the market.

The stock’s price has risen more than a dollar since its 2020 low–$33.41 US ($44.39 Canadian) on January 27, to $34.50 ($45.84 Canadian).

 

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