Business

Editor: Sharon Li
8 Oct 2008 02:24:51 GMT

SHARES in Toyota Motor Corp fell to their lowest in more than four years in Tokyo yesterday.

Consequently, Toyota lost its spot as the world’s largest auto maker by value to Volkswagen AG amid rising concerns that global growth is slowing following the collapse of the United States mortgage market, Bloomberg News reported.

Toyota declined 4.9 percent to 3,710 yen (US$36.49), the lowest since March 2004, at the 3pm close on the Tokyo Stock Exchange, giving it a market capitalization of US$124.3 billion. Wolfsburg, Germany-based Volkswagen’s value was US$127.5 billion at yesterday’s exchange rate.

Toyota’s sales in the US, the world’s largest auto market, have plunged this year as higher fuel costs have cut demand for Tundra pickups and Sequoia sport-utility vehicles.

Volkswagen’s shares have gained 87 percent this year as Porsche SE bid for a majority stake and hedge funds that had bet on the shares falling were forced to close positions.

“The auto industry is in a difficult situation right now,” said Edwin Merner, president of Atlantis Investment Research in Tokyo, whose parent firm manages about US$3.1 billion. “Toyota is well positioned to survive, but it will suffer like all the others.”

Toyota shares have fallen 56 percent since their peak at 8,340 yen in February 2007. By contrast, Volkswagen rose to a record high at 304 euros (US$412) on September 18.

Sales of cars and light trucks in the US fell for the 11th month in a row, the longest slide in 17 years, as the financial crisis caused lenders to toughen loan standards and consumers curbed spending.

US sales at Toyota plummeted 32 percent in September, the biggest such decline since 1987. Toyota is halting production of Tundras and Sequoias for three months from August and has reduced its North American sales forecast for 2009 to 2.7 million vehicles from 3 million.