Toyota Motor Shares Are Likely to Suffer Amid North American Woes

Toyota Motor (TM) , one of the most successful automakers in the world, has been having a hard time accelerating its profits.

The company is headed for a year of decline, possibly the first in its history.

Toyota Motor's profits fell sharply in the second quarter as well as in the entire first half of the company's fiscal year. The company's shares rose just under 1% in Friday trading. 

U.S. sales have hit a ceiling, even as Europe, Japan and the rest of Asia continue to show growth. That has led Toyota Motor to cut its forecast for North American sales for the year by 60,000 vehicles

Even as Toyota Motor plans to move toward new growth opportunities, American consumers are clearly shifting away from the company's cars. This makes the stock unappealing to investors.

Recently released six-month numbers reveal the nature of the slump: North American vehicle sales equaled 1.4 million units, a drop of 12,695 units. Sales of its eco-friendly, strong-selling Prius hybrid dipped over the last few quarters as cheaper fuel options, including electric cars, dimmed the appeal of gas-electric hybrid cars. 

Toyota's not alone in struggling with the North American market. Nissan Motors, another popular Japanese brand, has also posted a disappointing drop in profit.

Plus, the currency market is piling on additional woes. With Donald Trump winning the presidential race, the yen is now even stronger as risk-aversion trades keep gaining ground. This newfound strength is likely to affect Toyota Motor's fiscal third-quarter earnings, if the dollar-yen levels remain at these levels.

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