Toyota finance arm seeks govt loan-report

By David Twomey | March 03rd, 2009

A Toyota Motor Corportion financial services unit has applied for about US$2 billion in loans backed by the Japanese government, as the financial crisis threatens funding at the world’s top carmaker, according to a report on Japanese state TV broadcaster NHK.

Reuters newsagency carried the report, saying that with credit markets worldwide in turmoil, Toyota may be the first of a string of Japanese companies with high credit ratings to turn to state-backed loans prior to the closing of books for the Japanese business year at the end of March.

Credit default swaps on car makers in Asia and Europe are at steep discounts as investors worry about liquidity and short-term debt maturities at carmakers’ financial services operations.

The financial ratings service, Moody’s, implied ratings for Toyota and American Honda Finance Corp, based on credit default swaps, are both many notches lower than the agency’s actual ratings for the two companies.

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Wholly owned car-loan financing firm Toyota Financial Services has asked the state-backed Japan Bank for International Cooperation for a 200 billion yen (US$2.1 billion) loan to help cover rising credit costs in the United States, NHK said without citing sources.

Toyota spokesmen said they were checking on the report.

Carmakers worldwide are reeling from a collapse in consumer demand since last year that has forced them to cut production and shed jobs.

Finance company GMAC, the main lender to struggling automaker General Motors Corporation has been hit by losses in its vehicle and mortgage units, but won a US$6 billion government bailout in December and the right to tap lower-cost funding.

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Toyota faces an operating loss of 450 billion yen (about US$4.5-billion) for the year to March, as sales tumble in its biggest markets of Japan, North America and Europe.

Toyota Financial Services, with assets totalling 14.3 trillion yen (US$147 billion) as of the end of September, provides car leases around the world and home loans and asset management services in Japan.

Limited Slip

Well well well……..Toyota asking for Gov money. Isnt this the company that the Toyota Lovers said was in good financial positon? Never get in trouble? Bullet proof business? Have to start calling them the Japanese GM !

I told all of you Toyota lovers not to open your stupid mouths too soon…….I was so right !
Leigh

It starts…..
Bavarian Missile (.)(.)

Nah let them save themselves………….thats what the Toyo lovers will say……pffffffttttttttt right!
Neil

It’s their financial arm, not the business themselves

Even coming from a GM lover such as myself, this is nothing but a drop in a very large pond compared to the Big Three’s current woes
Limited slip

Neil, no its not just the financial arm. It is the business as well because they have asked for a 3 billion loan to stay afloat. This has been caused by falling sales. Ford havent asked for Gov money.
max

Limited your nick seems apt.
max

“Neil, no its not just the financial arm. It is the business as well because they have asked for a 3 billion loan to stay afloat.” – Limited

“Toyota Financial Services, with assets totalling 14.3 trillion yen (US$147 billion) as of the end of September” – Article above.

Gee, guess you missed that bit.
Limited Slip

you idiots obviously didnt see the news tonight.
RoFlmaTiC

I will eat the shorts that I am wearing if you can find a news article stating that non-finance arms of Toyota is seeking loans Limited Slip.

Here’s a good place to start looking though:

www .google.com/finance?q=NYSE:TM
Car Advice Reader

Neil, good to see that not every Holden/Ford fan on this site jumps onto the Toyota Bash band wagon!

Limited Slip, even though most of the tv news segments are rarely 100% correct when it comes automobile and other technical subject, I still doubt that they would have reported this nabout the non-financial arm of the company… How about removing your brand biased glasses??
Hope you don’t end up polluting this website with mindless anti-toyota rubbish like boganville missile, and rest of her muppet crew do!!

As for “Ford havent asked for Gov money.”
Volvo did, and Ford has asked for loan grant be made available for them, in case (when) they’ll need it!!
JasonP

It is interestng isn’t it?
The perception is/was that everything was travelling well at Planet Toyota.

Not sure I understand that they are asking for Gov’t assistance when Parent Company has such huge cash reserves.
I know they’re separate entities, but surely they’re still related?
Otherwise why would GM car a toss for GMACs fortunes?

They should cut the F1 Program, & divert the funds to Toyota Finance…
opel

Jason, its becoming increasingly difficult for auto finance segments to borrow money in the US, for obvious reasons(Ford Credit, GMAC). Note that given the meltdown, the cost of borrowing has also increased(interest rate).

It is cheaper in fact to borrow from the Jap government than other commercial sources. It’s a commercial decision which actually makes sense. Why pay a premuim?
As stated above, most finance arms of these companies have had their credit rating reduced, as that happens it becomes harder to borrow, and you pay a premuim to do so.

I have no doubt that the Jap car makers will take as much money as they can get over the next year or two, they have to. With GM and chrysler receiving billions, why should they use their own reserves, these companies are not(well, they don’t have any). The playing field is not level, in a free mrket, no Gvt interferance, GM & Chrysler would no longer be around, instead they are receiving billions in support(about 50 so far).
Franzz

Opel

Totally agree with your sentiments above. With the credit crunch, as bad debts come tumbling, most banks have cut down on lending by charging ridiculous rates. Car financing companies actually borrow money to lend to potential car buyers. So if JICA can provide funds at a cheap rate, Toyota will actually be able to offer cheap finance for their cars and in so doing INCREASE sales.
Frontman

the only thing I find amussing about all of this is that companies are now starting to report their true figures so that they can get assistance. By the end of this year you will see that a lot of Toyota’s little side lines are making huge losses that somehow never got reported before. Don’t worry though as the others will be forced to do the same (Honda, Renault-Nissan, PSA & Mazda included)
Rack and pinion

If Toyota are in such good shape why are they closing factories and sacking lots of people and they lost 5 billion or so as well. Regardless of wht people here say Toyota are in big trouble because Japan is in a massive recession……..or did you miss that??
Frontman

Be Careful R&P!! Otherwise the purists will start quoting JDPowers at you
But what you say is true, and has been for a while but just not reported hence the sudden changes at the top!
However, every manufacturer is in difficulty at present, it’s just the Koreans that are getting massive amounts of assistance (not nessecarily handout BTW) from the government particularly with their domestic market that are seemingly untouched, but their time is comming. SOON!
max

“If Toyota are in such good shape why are they closing factories and sacking lots of people and they lost 5 billion or so as well.” – Halfwit

Gee, do you think the meltdown in car sales could be the reason? Toyota is going to lose probably around 2 million unit sales this year, if not more. You think they should maintain full production levels and grow that loss bigger?

They are the biggest producer, they will probably hurt the most. Really, Japan is in recession, surely not! And the US, Europe and now Australia!

Here’s a thought, Toyota is in good shape, well, compared to GM, Chrysler, Ford, Fiat…

By the end of this year, the Jap Companies will be hurting, we have seen nothing yet.
max

“So if JICA can provide funds at a cheap rate, Toyota will actually be able to offer cheap finance for their cars and in so doing INCREASE sales.” Franzz

It will help them sell, no doubt about, they have to sell fist though, and that’s not all that easy right now.

TBH, I believe Chrysler and GM are selling interest free at the moment, courtesy of their “GIVE US MORE MONEY” date in Washington.

The real problem here is free trade and market forces are being thrown out the window. Chrysler and GM are getting taxpayer money, so they can sell cars interest free, not to mention the discounting on RRP. Now hey, there is some good buying out there, and that’s great for the consumer,($29995 drive away Omega)but by all rights, GM & Chrysler should now be dead, the remaining companies shouldn’t have to be competing against them, and their discounting, interest free sales, federal/taxpayer funding. On a global level, its just making the situation worse.
Dan

No doubt this current financial situation is hurting all manufacturers, so it comes at no surprise that some help may be sought by Toyota’s financing arm. However there’s also no doubt that toyota is doing a lot better than gm and chrysler, A LOT better.

“Hope you don’t end up polluting this website with mindless anti-toyota rubbish like boganville missile, and rest of her muppet crew do!!”

LOL! I just burst out laughing!!! Good one!
Bavarian Missile (.)(.)

Did we all hear today Australia isnt quiet in a recession ? Good news for us………….

Seems Japan are in the second this decade and seems the worst since WW II .
Frontman

Bavarian Missile (.)(.) Says:
March 4th, 2009 at 4:30 pm
Did we all hear today Australia isnt “”"”"”quiet”"”"” in a recession ? Good news for us………….

So what are you saying we’re going inot this kicking and screaming!!!!!!!!!!!!!!!!!! (he he he)
Sorry BM but couldn’t resist
Bavarian Missile (.)(.)

hahaha I realised that after smarty………..
Rack and Pinion

Toyota’s wholly-owned financial subsidiary is asking for about Y200 billion ($A3.17 billion), according to Japanese media. The carmaker has said it is seeking aid but declined to confirm the amount.

TOLD YOU I WAS RIGHT ……..Toyota the carmaker IS seeking aid…..
http://anycarfinance.com Any Car Finance

“If Toyota are in such good shape why are they closing factories and sacking lots of people and they lost 5 billion or so as well.” – Halfwit
http://anycarfinance.com Any Car Finance

Toyota finance is a very good finance company

Any Car Finance
http://www.youtube.com/watch?v=EhY4KJ_fblc PremiumFinance

well well another government paying out the big boys this is happening everywhere