http://www.vancouversun.com/business/Toyota+sales+decline+Ford+surges/3766246/story.html
Summary:
The article I read mentions that the Toyota Canada Inc. declines in the October sales in the aftermath of recalls. Toyota vehicles is separated from Lexus and Scion. They are losing money since the recalls, Toyota only sold 247 Scions in the first full month of sales. so they are planning to expand the Scion dealership in order to compensate the decline. Toyota sales are dipped 12.4 per cent compare to the sales in 2009. On the other hand, Ford surges by the time Toyota is declining. Ford is more profitable compare to Toyota. Ford increases 8 per cent in the October sales. It actually increases 20 per cent compare to 2009.
Connection:
The connection to chapter two is the plan of investment by looking the financial statement of a company. Financial statement shows whether the company is profitable or not. For example, after you looked at the financial statement of Toyota, you will noticed that this is not a good company to invest because the financial statement from the past to present is showing that Toyota's profit is declining. In contrast, Ford is a good company to invest because it is profitable and it has the potential of making a bigger profit.
Reflection:
The recalls of Toyota vehicles caused a huge impact of the direction of Toyota, it's profit is declining until now. As a investor, I would not invest to Toyota because Toyota is not that reliable as before after the recalls. Many people do not want to buy Toyota's vehicles. It decreases the profit of Toyota. If you invest Toyota at this time, you will actually lose money. On the other hand, this is a good opportunity for the investment of Ford because the profit of Ford is increasing rapidly, If you invest to Ford now, you will actually make a lot of money within a short period.
I agree that investors should not invest into Toyota at the moment. Their result of October is no doubt a sharp decline. It was the best month for four Canadian automakers, and others had also gain more profit. We know there is a problem, when a large amount of automakers are gaining profits except your company, and in this case, it is Toyota. Due to their net loss, the amount of dividends distributed to shareholders will be a smaller amount then before, and of course, these investors will not be happy. This idea could be also related to chapter 2 of our textbook. Ford is not the only good choice of investment right now, because many others are really stepping up financially as well. Kia Canada and Volkswagen Canada reported that they had the best sales ever in October. Also, Honda Canada had the best sales in 5 years. These automakers are making such an improvement even though the recovery from the recession is at a rather slow pace. Others are already listed in the ariticle. Automakers like the ones I listed could be potiental investments.
ReplyDeleteI agree that Toyota is having a bad reputation and losing profit from recalling vehicles. It might not be the best time to invest into Toyota at this moment. Also dividends may not be declared since dividends are declared by a vote of a company's board of directors. Toyota's sales are down 12.4 percent, so the board of directors may want to keep money for business activities or to cover there loss. However I disagree that Toyota is not considered a potential company to be invested on compared to Ford. Toyota is still one of the world's top car manufacturer and have good fundamental skills. Recalling vehicles may turn out to be a negative impact on Toyota, but I believe this incident will cause them to reorganize there internal management. I believe the market value of Toyota shares would be affected and possibility of decrease. There are also many choices of investment besides Ford and Toyota. Car manufacturers such as Honda, Nissan, GM and Hyundai are great competitors and have great potential to be invested on. The increase in competition will cause the car manufacture industry to grow into a more efficient industry. Therefore Toyota will seek ways to improve its production errors, so that recalls won't occur and affect there sales.
ReplyDeleteLike the other two comments, Toyota is earning a bad reputation by recalling vehicles and also hurting it company. Costumers will choose to buy their cars elsewhere and in the future Toyota's net profit will be affected and resulting in net losses. Another thing is other competitions will take this opportunities to invest like Ford's sales because it's sales increase up to 8 per cent. I also agree with you that if people buy cars from Toyota right now they would lose money for sure and many people would said this is a bad choice to buy a car from Toyota. In my opinion I think Toyota will have to learn the hard way and learn how to make better choice financially because if they don't this will happen.
ReplyDeleteJust a few years back, Toyota was amongst the most reliable producers of automobiles. Today, not so much... With the recent string of recalls involving their vehicles, Toyota's reputation with consumers has plummeted rapidly in the recent years. In our society, people more often than not remember you for your flaws rather than your achievements. It just takes a few significant mistakes for your reputation to be forever tarnished! Like Jennifer Feng said, you'd have to be a total fool to invest in a slumping company like Toyota!
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