Toyota shares up after US settlement was smaller than expected

Article by Christian A., on December 30, 2012

After it was announced that Toyota Motor Corp.’s settlement proposal of $1.1 billion was smaller than expected, its shares gained 1.6% last Thursday as investors breathed a sigh of relief. The settlement was for the resolution of U.S. class-action litigation claims over unintentional acceleration in its vehicles. Toyota said that to cover the estimated costs of the settlement, it will take a one-time pretax charge of $1.1 billion, according to court filings.

Due to the complaints over unintended acceleration, Toyota issued numerous recalls between 2009 and 2011, forcing the company to pull back more than 10 million vehicles globally and hurting its image for quality. Under the settlement, there is a $250 million fund for former Toyota owners who sold vehicles at lower prices due to the negative publicity.

There will also be a different $250 million fund for owners who don’t qualify for the brake override system. According to a senior trader at a foreign brokerage, the $1.1 billion charge and the $250 million compensation eliminated the uncertainty over Toyota's share price.

Toyota shares gained 1.6% to 3,890 yen in midmorning trade. This year, the stock has increased 51.7%, moving at a faster rate than a 36.5% gain in the Topix's transport equipment subindex, home to Toyota and other automakers.

Another factor that helped Toyota shares was the previous day’s announcement that it hopes to attain record-high groupwide global sales and production in calendar year 2012. Daihatsu Motor Co and Hino Motors Ltd. are included in the groupwide figures.

If you liked the article, share on:

Topics: toyota, shares

Comments

Recommended

November 17 is considered a very special day for Tesla, as this is the day that they revealed the highly anticipated Tesla Semi. But Elon Musk did not think the...
by - November 17, 2017
More details have emerged about the new sixth generation of the BMW M3 just as the German premium practically announced the end of the current-gen 3 Series with the unveiling...
by - November 17, 2017
All is set for Volkswagen’s plans to enter the electric vehicle game, as prompted by the so-called Dieselgate scandal. In fact, the German carmaker has already made a commitment to...
by - November 17, 2017
As BMW has already revealed, the next generation of the BMW M5 (F90) is a four-wheel drive high-performance sedan with overwhelming power output and torque at its disposal. However, it...
by - November 17, 2017
McLaren unveiled a one-off Gold - on - Black 720S at the 2017 Dubai Motor Show which will be on display throughout the entire stretch of this week’s event. The...
by - November 16, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries