If you’d purchased $1,000 worth of Wal-Mart Stores, Inc. (NYSE:WMT)’s shares on Aug. 25, 1972, your investment would be worth $1.1 million 41 years later — a return of roughly 114,000%, not counting any reinvested dividends, according to the company’s historic investment calculator.
Competition arrives for American carmakers
Toyota Motor Corporation (ADR) (NYSE:TM) arrived in the United States on Aug. 25, 1957. It was the first time Japanese cars had been imported into the U.S., heralding the start of a new era of competition for Detroit’s Big Three. That day, two Toyopet (as Toyota Motor Corporation (ADR) (NYSE:TM) cars were initially called) Crowns rolled off their ship and into America’s hearts … well, not really. The American public didn’t care much for these “Toyopets,” whose name reminded English-speakers of toys and pets, or possibly pet toys, or pets treated like toys, like Paris Hilton’s Chihuahua. The company soon adopted Toyota Motor Corporation (ADR) (NYSE:TM) branding for its cars, but progress was slow at first. The Big Three held 93% of the American market in 1957. Two years later, that grip had loosened to 83%, but that was largely due to the rise of AMC and the invasion of European imports, rather than Toyota Motor Corporation (ADR) (NYSE:TM)’s success.
Toyota Motor Corporation (ADR) (NYSE:TM) was undeterred by its stiff competition and persevered in spite of some damaging import tariffs that restricted some of its models from effective competition. The 1973 oil embargo and resultant price shock was a major turning point in Toyota’s efforts, and by the end of 1982 — the year Toyota Motor Corporation (ADR) (NYSE:TM) merged its manufacturing and sales organizations into one company — imported cars accounted for 27% of the American market, and Japan was by far the largest source of imports, with an 80% share. In 1986, Toyota began manufacturing cars in the United States, but it would be another 13 years before the company listed its shares on the New York Stock Exchange. By this point Toyota held 9% of the American auto market.
Toyota became the world’s largest automaker in 2008, and it held that title for each of the following four years, with the exception of earthquake-ravaged 2011. In 2012, after rebuilding its production capacity and rebounding from an embarrassing spate of recalls, Toyota sold 9.75 million vehicles around the world, with 2.1 million of those cars sold in the United States, good for third place in the U.S. with a market share of about 14%.
Trust the gecko
Then, in 1975, as the company wobbled on the edge of bankruptcy, a certain investor named Warren Buffett stepped in with a $4.1 million lifeline, for which he received 1.3 million shares at an average price of $3.18. By the time Berkshire Hathaway Inc. (NYSE:BRK-B) announced its plans to buy the rest of GEICO for $70 a share, that investment had grown to a nominal value of $90.6 million — a 2,100% gain for ordinary investors, but just another good deal for Buffett.
The article Today in History: Food Pioneers, Toyota in America, and Buffett Buys the Gecko originally appeared on Fool.com is written by Alex Planes.
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more insight into markets, history, and technology.The Motley Fool recommends and owns shares of Berkshire Hathaway.
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