Early in the year, Toyota’s (NYSE: TM) stock was the darling of the car industry. The world’s largest manufacturer did not make a massive bet on EVs. Instead, it pushed production and sales of hybrids. In the meantime, the billion-dollar EV bets by Ford, VW, and other global car companies were hitting their bottom lines.
Toyota’s stock is still doing better than the sector’s weakest companies. Shares are down 1% for the year. Ford’s are off 38%. However, the market’s perception of General Motors (NYSE: GM) is better. The stock of the No.1 US car company is up 49% in 2024.
Toyota’s recent problems revolve around its US and China business. These are the two largest car markets in the world. In the third quarter, Toyota’s North American sales dropped by 20% in September to 162,595. Ironically, EV sales were part of the problem.
Toyota is suffering the same fate as other foreign car companies in China. Toyota’s China production dropped by 17% from April through September. It blamed local manufacturers led by EV giant BYD.
Toyota’s hybrid strategy may still be helping the company. However, it has too many headwinds in other parts of its business.
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