China based automakers are planning to compete with Toyota Motor Corporation

2018-12-27 08:06:58 larryzhang


In the view of Sanford C. Bernstein & Co, the China based automakers need 10 years or more in order to compete internationally, where Toyota Motor Corporation (ADR) (NYSE:TM) is already leading the show.

The featured company, along with General Motors Company (NYSE:GM) and Volkswagen AG, are well ahead in terms of spending on research, when compared with their Chinese counterparts.

According to Max Warburton, an auto analyst at Bernstein, the Chinese automakers need to spend much more on Research and development, which will enable them to compete in the international arena successfully. He added that the Chinese have sufficient fire power to compete in the global market.

Chinese vehicles are losing market share in the home market, because the international players are entering China and successfully establishing foot holds in the market, therefore, the challenge Chinese producers are facing is increasing with every passing second. The local companies are reportedly spending only 2 percent of revenue on research and product development. That is about half of the global average, according to the China Association of Automobile Manufacturers.

The Bernstein research team also found the development of the Chinese auto industry pleasantly surprising.

In the last trading session, Toyota Motor Corporation (ADR) (NYSE:TM) stock traded at the beginning with a price of $101.76 and throughout the trading session climbed to a high of $101.91 and later, when day-trade ended, the stock finally dropped -1.45% to $101.10.

TM current year earnings per share experienced a decline of -30.70%, while its current quarter performance remained 21.35%. TM has 1.72 billion outstanding shares, among them 1.53 billion shares have been floated in the market exchange. TM stock institutional ownership remained 1.50%.

The stock is ahead of its 52 week low 40.34% and is lagging behind its 52 week high price -4.62%. The Company's beta coefficient was 0.77. Beta factor measures the amount of market risk.