CEO headlines dealer meeting, emphasizes U.S. commitment
In an effort to dispel any doubt about how seriously Toyota takes its commitment to the U.S., CEO Akio Toyoda himself made an appearance at the brand's annual dealer meeting last week in Las Vegas. Toyoda sought to assure the more than 4,000 attendees that the Toyota brand is meeting the demands of U.S. consumers now while also setting itself up for success in the future through its electric-vehicle and artificial intelligence units, according to a Toyota spokesman and several dealers in attendance. Toyoda also looked to give dealers an extra dose of motivation ahead of the critical launch of the redesigned, eighth-generation Camry that's due by early fall. Much of the focus at the national dealer meeting beyond Toyoda's remarks was on emphasizing the "American-ness" of the Camry and the automaker's vast U.S. manufacturing and research footprint. With Toyota celebrating its 60th year in the U.S., such messaging was inevitable. But it has taken on added urgency within Toyota in the wake of President Trump's often withering criticism of automakers that import vehicles to the U.S., including from Mexico and Canada. As a candidate, he targeted Ford, and just last week he reportedly denounced German automakers. Dealers were reminded of previously announced initiatives that Toyota sees as reaffirming its commitment to the U.S. These include an expansion of its Princeton, Ind., light-truck plant and its Toyota Connected data hub in Texas, near the company's new North American headquarters. Yet Toyoda's pep talk was also a reflection of the troubles his company is currently facing. Toyota's U.S. sales this year are down 3.6 percent through April to 650,420 units; that decline is entirely due to slowing car sales, which have dropped 10 percent on the year. Globally, the automaker reported that net income dropped 21 percent in the fiscal year ended March 31; Toyota expects a decline of 18 percent for the current fiscal year, which would mark the first back-to-back profit decline in more than 20 years. Toyota has plenty riding on the success of the next-generation Camry, and made that clear to dealers in Las Vegas. The 2018 model rides on the same modular platform as the current Prius and new C-HR subcompact crossover. Toyota plans to emphasize its sportiness as well as its popularity among Americans. It has been the best-selling car in America for the past 15 years, although it's being eclipsed within Toyota's lineup by the RAV4 compact crossover. "With the new Camry, we think we have the opportunity to re-ignite the midsize segment," Bill Fay, senior vice president of automotive operations for Toyota, said in a statement to Automotive News. Yet the Camry will face the same headwinds as all cars currently: Consumers just like crossovers better. On that score, Toyoda also underscored efforts to boost light-truck capacity and tilt the brand's mix away from cars. In other product news: The redesigned Camry will be the first Toyota to get Entune 3.0, a new version of the infotainment system that will include cellphone-activated features such as remote locking/unlocking and vehicle locator. V-6 models will also have an option to wirelessly update navigation systems. Toyota is adding two new trim lines to the C-HR, which was initially planned as a single-spec Scion vehicle. Toyota will add a base LE trim and a top-end Limited trim to the current version, dubbed XLE. The RAV4 Adventure, Tundra TRD Sport and Sequoia TRD Sport models will go on sale in September. Toyota is targeting 40,000 annual sales of the more rugged RAV4 Adventure model, 1,300 sales of the new Sequoia model and 11,500 of the new Tundra model.
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A new study that looks at the effects of highly treatable diseases, ones for which greater access to continual medical care can mean the difference between life and death, finds that the American health care system lags behind much of the developed world.
Americans grumble all the time about the quality of our health-care system, but when we’re dealing with serious issues, such as injuries from an auto accident or cancer, we often count our blessings that we live in a wealthy country that has well-trained doctors with access to the latest medical technology. Yet those factors don’t always correlate with staying alive. That’s the distressing finding from a global study of what researchers call “amenable mortality,” or deaths that theoretically could have been avoided by timely and effective medical care. Christopher Murray, a researcher at the University of Washington, and his collaborators looked at 32 causes of death in 195 countries from 1990 to 2015 to create a health-care quality index they used for rankings. Murray described the findings as “disturbing.” “Having a strong economy does not guarantee good health care,” he said. “Having great medical technology doesn’t, either. We know this because people are not getting the care that should be expected for diseases with established treatments.”… As might be expected, many highly developed nations, such as Norway, Australia and Canada, scored well. Those in more-remote areas in sub-Saharan Africa, South Asia, Latin America and the Caribbean scored poorly… The United States measures well for diseases preventable by vaccines, such as diphtheria and measles, but it gets almost failing grades for nine other conditions that can lead to death. These are lower respiratory infections, neonatal disorders, non-melanoma skin cancer, Hodgkin’s lymphoma, ischemic heart disease, hypertensive heart disease, diabetes, chronic kidney disease and the adverse effects of medical treatment itself. And yet we spend more per capita on health care than any other country. But spending more per capita when tens of millions of people lack access to affordable medical care means enormous inequality in the provision and effectiveness of that spending. I’m sure Trump would say that this is all because of Obamacare, but this has been true for decades, long before the ACA existed. And the Republican replacement plan would make it far worse, stripping coverage from nearly 30 million more people. Following the cataclysmic disruptions triggered by the subprime crisis, real estate markets in the US, and other major economies across the world were left in a tailspin. A prolonged economic slowdown and contracting job markets resulted in a flattening of real estate prices in major cities globally. As seen in the graph below, price movement over the past ten years has been somewhat uninspiring in some cases across North America, Europe and Asia.
Due to an extended low interest rate environment, real estate in the US and other parts of the developed world have showcased signs of recovery in recent years. However, with the recent federal rate hike in the US, the path to recovery may not be without jolts. With frequent rate hikes in the US expected in the coming quarters, the mortgage rate could be up to 5.5% by 2018 — a significant rise from the present value of 4.2% (30-year fixed). A surge in mortgage rates will translate into a higher equated monthly installment (EMI), and hence not a very healthy sign for a recovering real estate industry. It will also increase the cost of capital for developers, which could impact the momentum of new projects. A surge in rates will also be inimical to REITs and their borrowing bandwidth. As rates climb it could also render REITs and other dividend driven instruments less attractive, with capital potentially being reallocated to the bond market in search of better returns. Given the fact that US federal rates are believed to be one of the most significant benchmarks in the global economic environment, the ramifications may soon be felt in other developed economies as well. The central banks of the UK, Australia, and Canada all could follow suit with rate increases in the near future. |
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November 2017
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