Is Toyota Motors (TM) is on the Path of Transition?

Toyota Motors (NYSE: TM) is a brand in itself. The company operates in the automotive sector, has a market capitalization of a staggering $245.38 billion and is headquartered in Japan. Toyota is known for making products that are reliable and dependable, an accolade that not many in the automotive sector attain despite years of struggle. The reliability and dependability of Toyota’s Brand have always attracted investors to the stock as well. The fact is depicted in the last year’s performance of the stock as well, whereby the stock has gained an increase of more than 13% during a year when the automotive sector generally depicted a dismal trend. As for the upcoming few months, bulls would dominate Toyota, the reason for which is mentioned below.

Recent Development for TM

Recently, Toyota Motors (TM) announced that it would be investing $383 million in its four manufacturing plants in the US. The plants are known for the production of new Toyota and Lexus vehicles. The move is aimed at providing support to the production of four-cylinder engines. The success of investment would be crucial in culling the interest of investors in TM stock.

In March, Toyota released the 2023 GR Corolla, which was quite a shift from the earlier built unexciting cars. The car has a race-inspired interior and a thrill-inducing power unit. Its lightness and aerodynamic shape provide it with a uniqueness that was not a speciality of Corolla. Owing to this uniqueness, TM stock value has experienced a significant positive change in the wake of the Corolla GR 2023 release.

Institutional Ownership in Toyota

Institutional ownership is an epitome of the fact that how much institutions trust or distrust the financial credentials of a certain company. In the case of TM stock, the current institutional ownership stands at a dismal 1.20%. However, the last 52-week period has seen a bit of turnaround for the stock, as the number of total institutional inflows during the period stood at $1.01 billion against the total institutional outflows of $501.9 million, a stat that could serve as a glimmer of hope for the company.

Final Remarks

The automotive industry is facing several challenges, which in future could have an impact on the companies involved in this sector like Toyota. The tightening regulations regarding the control of air pollution could prove to be an obstacle to the growth of automotive companies, including TM. With regards to Toyota specifically, it needs to rely upon innovation (just like it did in the case of GR 2023) and needs re-strategizing to instigate investors’ interest.

Related posts