Amid Increased Sales Globally, Toyota Plant Strikes in South Africa
South Africa is ahead of African National Congress elections this December, and the latest strike has pressured President Jacob Zuma's role and leadership in relation to South Africa's largest economy. In August, 34 workers at a platinum mine were killed while striking and Zuma has fallen under immense criticism by the public for failing to address these killings.
This strike follows suit of the labor strike talks among the Canadian Auto Workers (CAW) against the Detroit automakers recently, all of which came to agreements before a strike was enacted. Chrysler (OTC: FIATY), Ford (NYSE: F) and General Motors (NYSE: GM) all reached new four year agreements with the CAW, and subsequently automakers have experienced rebounds here in the United States.
Toyota's Durban plant currently manufactures 120,000 vehicles annually, 50 percent of which are intended for export. Toyota hopes to resolve the strike soon in order to keep production going in order to maintain recent confidence in vehicle sales.
Toyota recently reported sales figures that beat Ford and GM, after vehicle sales as a whole surged 12 percent in the month of September. Foreign automakers have experienced strength while domestic automakers saw smaller gains.
Premarket, shares of Toyota are up 2.17 percent after closing down Wednesday 1.81 percent. Year to date, Toyota shares are up 16.57 percent as consumers begin to feel more comfortable purchasing new vehicles.
Analyst sentiments for the automaker are positive. Bank of America recently raised first quarter expectations on Toyota ahead of Honda (NYSE: HMC) and Nissan based on recent showing that the latter two have struggled somewhat in global sales. Toyota has plans for new powertrain/transmission options and will continue to ramp up hybrid vehicle development and production in order to meet Corporate Average Fuel Economy (CAFE) standards, despite doubts surrounding the success of the sector's attractiveness.
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