Time to Buy Toyota ?

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Time to Buy Toyota Stocks?

[UPDATE : Toyota stock seem to have stabilized a bit but the recalls came being announced and there are lawsuits on the way - time to buy Toyota stocks?]

Unless you've been on Mars this week you are aware that Toyota are having problems with accelerators, gas pedals and brake pedals in a number of their models. Their stock price has slumped as a result so if you are not interested in their cars, is this the time to buying Toyota stocks?
Toyota in a statement yesterday said they were ‘Confident’ : “Our message to Toyota owners is this -- if you experience any issues with your accelerator pedal, please contact your dealer without delay. If you are not experiencing any issues with your pedal, we are confident that your vehicle is safe to drive.”

A US Transportation Department official said the government is investigating whether the cause is not the pedal but an electronic throttle system as is alleged in at least 17 lawsuits.

"In terms of electronics of the vehicle, we’ve done exhaustive testing and we’ve found no issues with the electronics,” Toyota’s Lentz said on a conference call with reporters Feb. 1

Toyota said it will fix the sticky-pedal problem by getting dealers to install a steel plate to reduce friction that may develop with condensation and wear.

The U.S. recall for pedals that stick applies to three SUVs from these model years, the 2009-2010 RAV4, 2010 Highlander and 2008-2010 Sequoia. Also covered by the safety action are the 2009-2010 Corolla and 2005-2010 Avalon sedans, some 2007-2010 Camry sedans, 2009-2010 Matrix hatchbacks, and 2007-2010 Tundra.

Toyota also has recalled about 5.6 million Toyotas and Lexus cars and trucks in the U.S. and Canada as the floor mats might trap accelerator pedals causing the cars to speed up uncontrollably. This includes the 2007-2010 Lexus ES350, 2006-2010 Lexus IS250 and 2006-2010 Lexus IS350. About 2.1 million Toyotas are covered by the recalls.

LaHood said to stop driving your Toyota but later retracted what he said.

Some people are terrified and there is also a problem with the brakes in some Prius cars in Japan.

The Prius problem in Japan could undermine Toyota sales in its home market, where so far there have been no recalls caused by the gas pedal issue. The Prius was Japan’s best-selling model in 2009 and is "Toyota’s flagship model, its key to the future,” said Ashvin Chotai, managing director of Intelligence Automotive Asia Ltd.. “If that model gets tainted, that would suggest Toyota’s crisis has moved on to the next level.”

Toyota also took a long time to deal with the problem, which first becamse common knowledge about 6 months ago.

But what about the Toyota stock? Today is down to a 10 month low losing 3.5% on the Tokyo stock exchange.

Toyota 6-year chart

Toyota 1-month chart


The chart doesn't look good and with Toyota's problems and lawsuits unlikely to go away anytime soon I won't be buying either their cars or their stocks.
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