How did Tokyo digest Toyota’s lackluster U.S. May sales performance? In a market that forged ahead by 19 percent, Toyota grew only 6.7 percent. Even more embarrassing, other Japanese brands like Mazda (+ 35 percent), Subaru (+35 percent), or Nissan (+24 percent) had outpaced the market. When Tokyo woke up to the bad news this morning, everybody ran to the phone, called their broker and …
The stock market was deluged with Toyota buy orders. The minute the Tokyo stock exchange was open for business at 9, the Toyota share (known as 7203 in Japan) rose 115 Yen to close near the day’s high at 3,350 Yen. Nandeska?
People had expected less. Politely, The Nikkei [sub] said that “earlier market predictions for Toyota’s new car sales were for a single-digit increase.” The Nikkei followed Ed Niedermeyer’s reasoning. Ed explained yesterday: Toyota had sold a lot of cars in May 2009. Of course, it also helped that investors think that people will buy cars again. The slightly weaker yen mad export-heavy companies such as Toyota more attractive.
The exercise proves the fallacy of tracking year-on-year percentage growth.
A much better metric is market share, along with size of market. That’s usually used inside of car companies. However, it’s harder to put in a headline than “Toyota Up 6.7%, Market Up 19%.” Looks like we’ll have to live with the confusing percentages for a while.
