(Articles on the impact of the Toyota recall on Sirius XM updated with analyst observations, additional background information and stock price changes.)
NEW YORK (
could well take a hit in subscriber growth from the
sales, production and recall debacle -- but investors in Sirius XM can rest assured that the company will be fine.
Wall Street Strategies analyst David Silver points out that
, GM and other automakers have agreements with the satellite radio company too, so Sirius can get new customers through them.
"You could see some backlash with Toyota, but it won't be that dramatic -- only because Sirius has agreements with just about every other car company," Silver notes.
On Friday, Toyota's president
Akio Toyoda spoke at a last-minute press conference
offering both an apology regarding the sudden acceleration problems that have led to mass recalls and a proposal for better quality-control measures.
Still, Toyoda said that Toyota is still deciding on how to amend the braking problems in its popular new hybrid-gas-electric Prius.
In a move to mollify confused customers, Toyoda said he will be setting up a quality-control committee.Toyota has announced that the task force will have a six-point action plan consisting of improving the quality of the inspection process; enhancing customer research; establishing an "automotive center of quality excellence; support from outside experts; increased communication with regional authorities; and improving the autonomy of its regional subsidiaries.
Toyoda, born May 3, 1956, is the grandson of Toyota's founder, Kiichiro Toyoda.
Toyota Motor Sales U.S.A. on Friday said that Toyota dealers nationwide have received the parts, information and training they need to fix accelerator pedals in recalled Toyota division vehicles, and that repairs on the involved vehicles have begun. The automaker said that the actual repair requires about 30 minutes of work.
The company says that many of its dealers are working extended hours -- some 24/7 -- and adding service technicians and other staff to complete the recall campaign as rapidly as possible.
Toyota stock settled at $74.70, up 4.1% on Friday.
Granted, much damage has already been done: Some customers say
they no longer trust what Toyota has to say
about solutions for its sudden acceleration problems, given that safety inspectors have been examining its electric throttle system as a possible cause of the problem; meanwhile Toyota had been attributing the problem to gas pedals getting stuck in floor mats and "sticky accelerators."
Toyota's nemesis Ford lost 1.4% to $10.90. The company plans to fix 17,600 Mercury Milan and Ford Fusion gas-electric hybrids because of a software problem.
Other automaker stocks also lost ground.
fell 1.5% to $34.50 and
( DAI) slid 0.6% to $44.90.
SIRIUS XM has said that it expects to achieve positive full-year subscriber growth in 2010, based upon assumed 2010 automobile sales of 11.3 million units. Meanwhile, analysts at Edmunds.com expects new light vehicle sales to increase by almost 11% in 2010 to 11.5 million units. Unlike many observers, an Edmunds believes that Toyota is already recovering from the recall.
Edmunds says it has noticed that Toyota purchase intent has risen dramatically since the company announced a fix for its recall. Analyst David Tompkins states that Toyota purchase intent fell from 13.9% of Edmunds.com car shoppers to 9.7% during the height of the recall frenzy; however, Toyota purchase intent is back to 11.8% and seems to be climbing steadily, Tompkins notes.
-- Reported by Andrea Tse in New York
>>Toyota Chief: No Decision on Prius Brakes
>>Toyota's Bad Week Gets Worse
Follow TheStreet.com on
and become a fan on
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.