Toyota Motor Co.’s comeback appears to have hit a couple of serious potholes with trouble in China and a huge and potentially expensive new recall.
In response to the new challenges, Standard & Poors has lowered its opinion of Toyota’s American Depository Shares to “Hold” from “Buy.” Those shares are used to permit the Japanese automotive giant to trade in the U.S., as well as Japan.
“Although we have not yet quantified the financial impact, we lower our opinion to reflect headline risk we see from increased headwinds in certain parts of its operations,” Efraim Levy, S&P’s senior equity analyst, said in a note to investors.
Toyota had been on a roll for most of 2011, the maker’s outpacing the recovery of the overall U.S. market and posting a 41.5% jump just last month. President Akio Toyoda accompanied strong earnings news released in August by forecasting Toyota with sold nearly 10 million vehicles worldwide this fiscal year, handily out-performing the previous 9.36 million record set in 2007.