Toyota orders for May promising

by SR on June 21, 2012

Normalising nicely

Toyota domestic auto orders, in thousand units and percent year-on-year

  • Year-on-year order growth returns to normal levels. Sifting through recent news in the Japanese trade press, I noticed that Toyota’s orders for May 2012 came in at about 124k units (click on chart above for larger image). This data series is not consistently disclosed and it’s reported only sporadically even when it is disclosed, so it’s not something for which we can construct a long-term data series. Nor, quite honestly, is it important enough to warrant a great deal of attention. However, used as another piece of the investment jigsaw it does have some value as it confirms to us that Toyota’s orders in Japan are holding up well.
  • May at worst normal, maybe a bit better than usual seasonality. Looking at the chart above it may seem that orders fell off a cliff in April, falling 30.8% month-on-month. That’s likely the usual seasonal state of affairs, as sales in April also average a very large decline vs March, typically -40% to -50% month-on-month. Importantly, the median increase for Toyota’s sales in May over the past decade has been 6% month-on-month. Toyota orders in May 2012 rose about 11%. I’m not going to insist that Toyota’s orders were much better than usual in May, because sales and orders may have slightly different seasonality. Still, at the very least domestic orders at Toyota seem to have been as good as, or a touch better than, the seasonal norm. So we have some reassurance that Japan – which is still, after all, a very large and important market for Toyota, despite its lack of growth potential – is not going off the rails. We need to keep an eye on domestic numbers as they will probably drop off sharply when Japan’s eco-car subsidies end over the next few weeks.

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