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Toyota business prospects

Discussion in 'Fred's House of Pancakes' started by bwilson4web, Nov 3, 2022.

  1. bwilson4web

    bwilson4web BMW i3 and Model 3

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    I have not independently verified the depressing claims of this 11 minute YouTube about Toyota business prospects. There are a lot of negative and often false videos around about Tesla, GM, Ford, VW, and other established car makers so I take 'doomed' claims with healthy skepticism. But sometimes, criticism is warranted if nothing else as a caution:



    I remember tracking monthly Prius sales including the peak around September 2013 when there were three models being sold. I still have fond memories of a Prius V taxi that took me to where I bought our 2014 BMW i3-REx. Sitting up front to talk with the driver, it was a quiet ride and he was making out like a bandit compared to the gas costs of regular ICE taxies. But soon, Toyota killed the Prius V and commuter sized Prius C which did not make sense. Worse, drivetrain innovation and improvement seemed very small if at all.

    There are fundamental engineering flaws within Toyota models especially their moth-to-flame attraction to hydrogen fuel cell vehicles. Yet recognizing my bias, I found the financial data in this YouTube both news and disturbing. Perhaps some of the financially oriented members might critique the video?

    Bob Wilson
     
    #1 bwilson4web, Nov 3, 2022
    Last edited: Nov 3, 2022
  2. PriusCamper

    PriusCamper Senior Member

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    I didn't watch the video... But the only flaw Toyota suffers from is old school capitalism. As in the difference between the advancements of Tesla and the advancements of Toyota is that the latter went the traditional route of owning patents that prevented their competitors from using the same technology, which slows down progress in so many ways.

    For example the first hydrogen fuel cell cars in Toyota Mirai were still using NiMH battery packs instead of Lithium because Toyota had more patent control/profitability over that much older chemistry than a much more advanced lithium pack. And where are all Toyota's hydrogen car competitors? Again, it was a technology that Toyota could control, yet since it's introduction the whole market has passed Toyota by...

    As in back in 2008 when the global economy tanked and soaring oil prices came back to earth Toyota was better positioned than all the other auto makers to survive the storm. But now 14 years later, they seem to be the least prepared to adapt and change when the next global crisis hits.
     
  3. Trollbait

    Trollbait It's a D&D thing

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    Toyota didn't kill the the Prius v or c, they just stopped selling them in the US as sales were poor, and they could make more profit upselling buyers to a bigger car or SUV. The v was available for 4 more years globally for a 10 year production run. The design plans for the gen4 Prius might have not been inline for a wagon version. Then there was going to be a Corolla wagon hybrid, which was likely the main reason for discontinuing the v. With the introduction of the latest Corolla, Toyota consolidated model line ups; the Auris and Avensis were discontinued in Europe.

    I though the Aqua was going to be replaced by the Yaris hybrid, but I guess it was too popular in Japan. IIRC, the gen2 was the first hybrid to get a bi-polar NiMH battery.
    For a non-plug-in hybrid, NiMH is a fine chemistry. Even better than Li-ion in some regards. Others moved to Li-ion to avoid supply competition with Toyota. Then others because their name was mud in regards to NiMH. Toyota just stuck with NiMH as long as they have because the company likes to get the most out of their investments. They are also a conservative company slow to change something that is working. Which is why it is used in their FCEVs. Toyota's mistake with the Mirai wasn't over the battery.

    Li-ion was beating out NiMH is price, but EV demand has increased the Li-ion costs. We'll likely see NiMH in Toyotas for some time yet.
     
  4. bisco

    bisco cookie crumbler

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    couldn't really make anything out from all the graphs, probably a lot of fud. short seller?
     
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  5. bwilson4web

    bwilson4web BMW i3 and Model 3

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    I will try to outline the video later.

    My impression is Toyota has too much debt to support the transition to EV profitability. But Toyota is not alone as Ford and GM face similar problems. Given the Fed interest rate increases, 3x the earlier rate, it looks grim for them.

    Bob Wilson
     
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  6. Zythryn

    Zythryn Senior Member

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    Definitely not a short seller although he may have an EV bias.
    The fact that Toyota has a huge amount of debt is not in question. It is information straight from Toyota’s financial statements.
    Where I am somewhat skeptical is his statements about the quality of the debt.
    I also believe Toyota still has opportunities to avoid the fate of Kodak. Where the video concludes it is all but inevitable.
     
  7. PriusCamper

    PriusCamper Senior Member

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    Toyota has no idea how huge the sales numbers for a car like this would be... Ever since Subaru was hugely successful, especially in the PNW, with the wagon-themed economy car people have been hauling truck loads of stuff without wasting gas like a truck or SUV does.

    Prius V was a failure in the US because they tried to turn it into a crossover to an SUV customer base who are too stupid to care about gas mileage and killing the planet.

    Without realizing small economy cars in wagon form will beat any other hauling vehicle MPG wise every day Toyota has massively failed in coming years.
     
  8. Trollbait

    Trollbait It's a D&D thing

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    Ford and GM are already splitting the ICE and EV businesses.
    I think they do, but also know they have huge sales numbers for the Rav4 and offspring with higher margins. They weren't they only car company to abandon wagons. Toyota greatly outsells Subaru, even if you discount the full frame trucks.
     
  9. hill

    hill High Fiber Member

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    There are lots of negative Toyota videos like this - as the OP reminds readers. Recently saw one comparing Toyotq to Kodak Film, not effectively watching market changeover. If GM can survive tho requiring it to go through bankruptcy - it's doubtful amorphic market conditions can kill off Toyota.
    .

    LE2127 ?
     
  10. Zythryn

    Zythryn Senior Member

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    Hmmm, I don’t consider bankruptcy, survival. Much less bankruptcy followed by a government bailout.

    Lots of people were very vocal about Tesla’s debt. The debt a company is carrying is a valid concern.
    However, that debt level must be taken in context of the company’s situation (i.e. growing, investing, static, shrinking, etc).
     
  11. bisco

    bisco cookie crumbler

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    There is no relationship between Toyota debt and bevs that I am aware of.
    But idk the reasons for the debt, or how much profit it is eating up
     
  12. bwilson4web

    bwilson4web BMW i3 and Model 3

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    The alternative to debt is to issue stock. But affordable debt has a lot of advantages for management.

    Bob Wilson
     
  13. Zythryn

    Zythryn Senior Member

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    The hypothesis is that because of their debt, combined with decreasing profits, Toyota wont have the means to make the transition to EVs. That is, without a huge bailout and/or restructuring.
     
  14. bwilson4web

    bwilson4web BMW i3 and Model 3

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    A Munro YouTube included theses screen shots:
    upload_2022-11-6_0-30-19.jpeg

    From that business formula:
    upload_2022-11-6_0-32-3.jpeg

    The source:


    Bob Wilson
     
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  15. Zythryn

    Zythryn Senior Member

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    For anyone interested in the Altman Z-score and what it is:
    Altman Z-Score: What It Is, Formula, How to Interpret Results (investopedia.com)

    An excerpt:
    I had not heard of it prior to Sandy's video posted above. After looking into it, I was surprised how long it had been around and how accurate.
     
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