Toyota Motor Corporation TM is mulling over investing around 60 billion yen ($550 million) in China-based ride-hailing upstart, Didi Chuxing, per Reuters. Given the increased investment by global auto majors in the autonomous vehicle front, the Japan-based auto giant is not sitting idle as well.
The proposed investment in Didi Chuxing is a testimony to Toyota’s growing focus on ride-sharing activities.
Notably, Toyota planned to start testing its self-driving vehicles by fiscal 2020. It is also collaborating with other entities to develop autonomous car technology. In fact, the company already made huge investments in ride-hailing companies such as Uber and Grab as established traditional automakers race to collaborate with the tech companies.
Per its sources, Toyota constantly strives to evaluate its business strategy by keeping rapidly evolving global perspective in mind. In order to meet customer needs in the areas of “Connectivity, Autonomous, Sharing and Electrification”, the company is reorienting its business. In fact, Toyota has been eyeing to set up a mobility-services company in China, in sync with its latest strategy for the country.
Shares of Toyota have outperformed the industry it belongs to in the past three months. Over this time frame, shares of the company have edged down 1.5% compared with the industry’s decline of 7.2%.
Currently, Toyota has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the auto space are Ford Motor Company F, Fox Factory Holding Corp. FOXF and Cummins Inc. CMI, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ford has an expected long-term growth rate of 7.3%. Over the past three months, shares of the company have gained 11.9%.
Fox Factory has an expected long-term growth rate of 16.4%. Over the past three months, shares of the company have gained 5.3%.
Cummins has an expected long-term growth rate of 8%. Over the past three months, shares of the company have gained 3.5%.
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