Toyota Slowing Down? Don't Count on It

This morning, Toyota posted its quarterly earnings, which, given the industry's struggles, should please investors. Earning increased 9% on stronger U.S. and European sales.

So why are investors cautious about Toyota? The company is spending more on labor, operational expenses and R&D. It has people wondering if Toyota's steady and strong growth is slowing down. I don't think so.

Toyota's costs are increasing as the company spends more on the Tundra pick-up rollout here in the States. As the company continues its impressive expansion in Europe, there will be some greater expenses. And Toyota's investment in R&D should not be viewed as a negative.

From my perspective, Toyota is not slowing down. Yes, its product cycle may not be as aggressive as Honda's in the near future. But that doesn't mean the company is resting. As it tweaks its mix on the Tundra, the company is also freshening up its entry-level Scion lineup and pushing the Lexus luxury lineup towards higher-priced models.

No, as I see it, Toyota is not slowing down. Investors who bet on that may find themselves questioning that move down the road.

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