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Quick Hits: Toyota Gas Guzzlers Sent to Middle East, Reunited with Gas


Brief scrutiny of today's headlines.

When SUVs and monster trucks aren't selling in the US, send 'em where fuel is cheap.

Toyota (TM) plans to export thousands of US-made SUVs and pickup trucks to Saudi Arabia and other oil-rich Persian Gulf countries as well as Latin America.

High fuel prices and the credit crunch have pounded sales of gas-guzzlers as consumers switch to fuel-efficient cars. Toyota's truck sales were down about 35% in September and larger models reported sharper drops.

The exports, scheduled to begin in December, represent a significant chunk of Toyota's production of behemoth vehicles. The company plans to export about 15,000 Sequoia SUVs, or about 45% of the 33,000 vehicles made at its Indiana plant before it shuts down to re-tool in September.

Toyota also hopes to unload some Tundra pickup trucks. The company would like to cut its 100-day or so inventory to 30 or 40 days.

When the economy is strong, nearly all vehicles made in the US are sold domestically.

Unloading the gas guzzlers is a smart move, but it may be a stop-gap action because auto sales are almost certain to decline further before rebounding.

Nissan (NSANY), Japan's third-largest automaker, cut its earnings forecast 53% and set aside dividend plans. Honda (HMC) cut its operating profit forecast by 13%. Toyota is likely to revise its earning outlook next week.

Luckily, there are lots of petrodollars in the Middle East. But the price of a barrel of oil on the New York Mercantile Exchange recently fetched $65.06, down about 55.8% from the record $147.27 reached in July. If the trend continues, it might be smart to unload those monster SUVs and pickup trucks now.
No positions in stocks mentioned.
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