Question

Toyota Manufacturing Company (TMC) is a global vehicle manufacturing company that operates in many markets, and its business is affected by global factors. The company is subject to strict scrutiny by governments and environmentalists, which could affect its ability to sell cars in certain markets. The company’s earnings are also affected by the decision to call back more than 1.5 million vehicles due to the fault found in their fuel pump. Moreover, TMC diesel-engine vehicles were also found to have problems with their filters, and the company faces litigation due to the high number of complaints against it. The company’s sales are also affected by the current COVID-19 crisis situation prevailing in major markets across the globe. Car manufacturing companies were forced to shut down their plants, which affected sales. Furthermore, the biggest car markets, including China and the US, have reached the maturity that limits demand for new vehicles.

From the above paragraph, if an investor want to invest in this company, would be a wrong decision currently? Explain

Answer 1