According to Bloomberg and Reuters, on September 24, Japanese automaker Toyota announced an increase in its stock buyback plan from 1 trillion yen to 1.2 trillion yen (approximately $8.31 billion) in response to strong demand in its key markets of Japan, Europe, and North America, with the program set to run until April 30 of next year.
In a filing submitted to the stock exchange on September 24, Toyota noted that it had added 200 billion yen to the 1 trillion yen buyback plan announced in May. This indicates that the company may repurchase up to 3.93% of its shares. Toyota stated that this decision was based on its "recent stock price levels."
On May 8, Toyota decided to buy back up to 410 million shares, representing 3.04% of its outstanding shares (excluding treasury stock). However, since then, Toyota's share price has dropped by 27%. Currently, the stock price is roughly the same as it was in January, with only a 1% increase this year, compared to a 13.4% rise in the Nikkei 225 index over the same period. As of September 24, the company's share price was 2,617 yen.
Tatsuo Yoshida, senior automotive analyst at Bloomberg Intelligence, stated that just as Toyota works to electrify its fleet, the company's strategy to reduce strategic holdings will continue, although the pace will depend on specific market conditions.
In recent years, the Japanese government has urged large companies to unwind cross-shareholdings that have been established for decades to solidify business relationships. Toyota's expansion of its stock buyback plan aligns with this trend.
In July, as part of a broader effort to sever strategic holdings with financial partners, Toyota announced it would buy back 806.8 billion yen worth of stock from major Japanese banks and insurance companies.
Additionally, Bloomberg previously reported that Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. would also begin to divest their strategic holdings in Toyota, valued at 1.32 trillion yen.
