Toyota Motor Corporation (NYSE: TM) commenced operations in 1933 as the automobile division of Toyota Industries Corporation. In 1982, the Toyota Motor company and Toyota Motor Sales merged into one company, the Toyota Motor Corporation of today. As of March 31, 2019, Toyota operated through 608 consolidated subsidiaries (including variable interest entities) and 201 affiliated companies. Toyota primarily conducts business in the automotive industry. Toyota also conducts business in finance and other industries.
Toyota has various competitors across the world. In this analysis we see how Toyota does against Honda, a fellow Japanese Automobile company.
- Toyota had a constant increase in automotive revenue over the past few years. It rose from $238.4 billion in 2017 to $243.6 billion in 2019. Trefis estimates the trend to continue and revenue to be around $253.4 billion in 2020 (ended March 2020).
- Honda has also seen a constant increase in automotive revenue over the past few years. It rose from $93.4 billion in 2017 to $99.7 billion in 2019. Trefis estimates the trend to continue and revenue to be around $102.8 billion in 2020 (ended March 2020).
Comparing Automotive Segment’s Gross Margin:
- Toyota’s Automotive segment’s Gross margin has been fluctuating over the past few years. The metric increased from 24.2% in 2017 to 25% in 2018 but fell to 24.1% in 2019. Trefis estimates a bit of recovery in 2019 and the metric to reach around 24.2% of Automotive Revenue.
- Honda’s Automotive segment’s Gross margin has also been fluctuating over the past few years. The metric decreased from 17.4% in 2017 to 16.33% in 2018 but increased to 19% in 2019. Trefis estimates a bit of fall in 2019 and the metric to reach around 18.5% of Automotive Revenue.
- As per the comparison above we can see that for Automotive sector Toyota performs much better with respect to sales volume, average price per vehicle, Overall revenue, and Gross Margins.
- While Honda, though not as good as Toyota in the segment, has shown an overall positive growth especially in terms of Overall revenue in the segment and sales volume.
- Overall, both the companies seem to have a positive outlook despite the uncertainty around the global automotive market.
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