Toyota Financial Services Unit Applies for Government-Backed Loans
With news about government bailouts and loans coming from all over the world, more news comes from Japan today. A Toyota Motor Corp. financial services unit has applied for about $2 billion in Japanese government-backed loans as the financial crisis threatens the company’s funding.
The financial services unit, Toyota Financial Services, is wholly owned by Toyota Motor Corp. and deals with Toyota’s car-loan financing. Japanese TV broadcaster NHK says the firm asked the state-backed Japan Bank for International Cooperation for a 200 billion yen ($2.1 billion) loan to help cover rising credit costs in the United States. NHK has not given any information as to where the information came from.
Toyota Financial Services’ loan request stems from the collapse in consumer demand for cars and the increasing credit standards wary banks are placing on loans. The lack of consumer demand has caused carmakers to cut jobs and production and look for government-backed loans as a last resort if cash supplies dwindle.
GMAC, General Motors’ main financial lender, applied for and won a $6 billion government bailout in December. The finance arm was hit by losses in its auto and mortgage units.
Toyota Financial Services provides home loans and asset management services in Japan and car leases around the world. The firm had assets of 14.3 trillion yen ($147 billion) as of the end of September.
Source: Automotive News