In a shocking day for Japanese stocks—the benchmark Nikkei index had its third worst session in history, falling 9.4%—Toyota’s recent stock slump accelerated. By the close of trading at 3pm, Toyota’s stock was down 12% on reports that its earnings will fall a worse-than-expected 40% this year. During 2008, Toyota is now down an eye-watering 46%—and this at a company which is still expected to make over $10 billion this year.
Still, anyone popping into Toyota’s swanky new Lexus dealership in Tokyo’s upscale Aoyama district would be hard-pressed to sense the pain. The dealership and adjacent Lexus gallery, which showcases a Lexus LF-A concept car and a nice line in Lexus-branded trinkets (Lexus aroma oil anyone?), is perhaps the most expensive Lexus dealership ever. As well as its costly location in one of Japan’s most fashionable districts, the flooring is made from marble, while the sound system, specially designed by Yamaha, “integrates indirect sound and beam forming technologies” to allow customers to forget the noise and bustle outside.
For foreign visitors, there are even staff on hand who can speak English, Chinese, Korean, French and German. And on the floor below there’s a Lexus repair shop so clean and organized it could pass as a surgical theater. One highlight: Shiny Lexus-branded tools are warmed by an overhead heater in case engineers’ fingers get chilly. The remarkable facility, which Toyota hopes will sell around 500 Lexus a year and raise the brand’s profile, is the company’s latest tool to take-on BMW and Mercedes in Japan. The German marques, which remain popular with wealthy Japanese, are one reason for a disappointing start at Lexus in Japan, which debuted in 2005. Despite the expense (the company wouldn’t say how much) Toyota senior managing director Yoichiro Ichimaru admitted that the global economic problems are especially tough on sales of larger vehicles with larger, less fuel efficient, engines. One solution for Lexus could be a dedicated hybrid Lexus model, which Toyota is expected to unveil next year.
The spending doesn’t stop there. A report in today’s Nikkei claims that Toyota and Mori Building, a Japanese developer, will spend $800 million on a 79,000-sq.-meter site in Tokyo’s waterfront area. According the report, Toyota and Mori will spend a total of $2.8 billion for the land and the construction of a 23 story office and hotel complex including a facility where people can test drive cars.
Of course, for all world’s economic woes, one thing Toyota does have is plenty of cash: At the end of June, Toyota had about $25 billion of cash and liquid securities.