Toyota Motor Corporation (ADR) (TM): What Did You Miss?

Evidence is mounting that the global auto market is not only in recovery, but is in fact growing significantly. Several US automakers are enjoying rising sales in domestic as well as international markets, but growth from the number one Japanese car maker looks even more impressive. Toyota Motor Corporation (ADR) (NYSE:TM) delivered excellent results this week, benefited in part from a weaker yen. Let’s take a closer look at these impressive figures.

Rising Sales and Income

Toyota Motor Corporation (ADR) (NYSE:TM), having reclaimed its spot as the world’s number one car maker, saw its income more than double to $3.2 billion for the last quarter of fiscal 2013. The company’s efforts to cut costs have clearly paid off, and its results have also benefited from a weaker yen that has boosted Japanese exports across the board. Along with the Nikkei, Toyota Motor Corporation (ADR) (NYSE:TM)’s stock has been on a great run recently, adding nearly 50% over the last twelve months.

The full-year results are even more formidable. Operating income was up a staggering 271.4% compared to fiscal 2012, and net income was up nearly 240%. Net revenue for the full-year increased 18.7%, which together with the income figures, points to increased operating efficiency within the company.

The company credited the weaker yen with some $1.5 billion of its operating income increase, and cost cutting initiatives with around $4.5 billion. Management stated it is committed to producing ever-better cars, and reforming its manufacturing technologies to maintain its competitive edge. The outlook for 2014 is good, as the company expects to maintain its excellent performance through the fiscal year.

Increased Competition

While Toyota Motor Corporation (ADR) (NYSE:TM) is for now still the world’s leading producer of cars, it is facing stiff competition from Asian as well as US competitors. Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have both been reporting substantially higher sales, as car makers worldwide are fighting for market share in the faster growing emerging markets. Ford reported an 18% sales increase for Q1 2013, its best results since 2007. The company’s fuel efficient offerings saw especially strong demand with record sales, and pickup trucks have also been doing well. The company’s sales figures in China are impressive, with a 54% increase in the country.

General Motors Company (NYSE:GM), another major US competitor, has also been thriving in the Chinese market. The company, whose brands include Chevrolet, GMC and Opel, recently became the largest automaker in China, with a market share of around 15%. For its latest report, the company announced it had sold 3.6% more vehicles compared to the same period a year earlier, but on the other hand saw its revenue as well as its income decline. Despite this, the stock rose several percentage points following the report.