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Toyota Motor Corp ADR TM

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Morningstar’s Analysis

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Chip Shortage Finally Becomes Too Much for Toyota

Analyst Note

| David Whiston, CFA, CPA, CFE |

Toyota has been stockpiling chip modules since the 2011 tsunami in Japan, which has allowed it to escape the vast majority of the production problems that rivals such as General Motors and Ford have suffered from the semiconductor shortage. However, the duration of the shortage and COVID-19 shutdowns in Malaysian chip plants have finally proved too much for even Toyota. On Aug. 19, the firm announced large shutdowns throughout the world, especially for 14 Japanese plants, that globally will reduce September output by about 40% from planned production, or 360,000 vehicles, according to Automotive News.

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Company Profile

Business Description

Founded in 1937, Toyota is one of the world's largest automakers with 9.92 million units sold at retail in fiscal 2021 across its light vehicle brands. Brands include Toyota, Lexus, Daihatsu, and truck maker Hino; market share in Japan is about 52%, while U.S. share is over 15%. The firm also owns large stake in Denso, a parts supplier, at least 16% of Subaru (with a deal to raise that to 20%), and holds investments in many other firms, including shares of Uber Technologies and about 5% in each of Mazda and Suzuki. Fiscal 2021 sales excluding financial services were JPY 25.1 trillion. Toyota also has a financing arm and manufactures homes and boats.

Contact
1 Toyota-cho, Aichi Prefecture
Toyota, 471-8571, Japan
T +81 565282121
Sector Consumer Cyclical
Industry Auto Manufacturers
Most Recent Earnings Jun 30, 2021
Fiscal Year End Mar 31, 2022
Stock Type
Employees 366,283

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