Toyota Requests Government Loan
03-03-09, 07:51 PM
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Toyota Requests Government Loan
GM's sales plummeted 53% in February from a year earlier, Ford's fell 48%, Toyota's dropped 40% and Nissan's declined 37%.
Carmakers around the world have been hit hard by the global downturn.
Earlier, Toyota, the world's biggest carmaker, said it was seeking a state loan to help its car financing unit.
US carmakers General Motors and Chrysler have received $17.4bn from the US government, while Ford has not been bailed out by the state.
"In our view, we are in an automotive depression," said Standard & Poor's equity analyst Efraim Levy.
"Shell-shocked consumers fearful for their jobs, the value of their homes and stock market assets are wary of making the sizable discretionary purchases."
GM said that total February sales were at their lowest level for the month since 1967.
GM's chief sales analyst Mike DiGiovanni said: "These are obviously unsustainable levels and will cause almost every major automaker across the world to seek government aid."
Government help
Toyota said that its car financing unit, Toyota Financial Services, was in talks with the government-backed Japan Bank for International Co-operation.
Local media reports said that it had applied for a 200bn-yen ($2bn; £1.45bn) loan. However, Toyota said no details had been decided.
Toyota has said it expects to report its first annual loss since 1950.
The Japan Bank for International Co-operation was set up last year to help struggling Japanese businesses.
Japan's Finance Ministry said earlier on Tuesday that it would provide an additional $5bn to the bank from its foreign exchange reserves.
'Not in danger'
Toyota Financial Services does 70% of its business in the US, where the credit crunch has made it harder to offer financing and the economic downturn has hit demand for vehicles.
General Motors' financing arm, GMAC, has been hit by losses and has received a $6bn bail-out from the US government.
Analysts said that the news did not mean that Toyota was in trouble.
"Toyota is not in danger. It's out to get the lowest price for funding that the strength of its credit can get," said Yasuaki Iwamoto, an analyst at Okasan Securities, told Reuters news agency.
"On the balance sheet, it doesn't matter if the funds are private or public."
Reports also said that Nissan was considering various types of government aid.
Toyota ended GM's 77-year reign as the world's largest carmaker last year, as its sales surpassed its US rival.
Carmakers around the world have been hit hard by the global downturn.
Earlier, Toyota, the world's biggest carmaker, said it was seeking a state loan to help its car financing unit.
US carmakers General Motors and Chrysler have received $17.4bn from the US government, while Ford has not been bailed out by the state.
"In our view, we are in an automotive depression," said Standard & Poor's equity analyst Efraim Levy.
"Shell-shocked consumers fearful for their jobs, the value of their homes and stock market assets are wary of making the sizable discretionary purchases."
GM said that total February sales were at their lowest level for the month since 1967.
GM's chief sales analyst Mike DiGiovanni said: "These are obviously unsustainable levels and will cause almost every major automaker across the world to seek government aid."
Government help
Toyota said that its car financing unit, Toyota Financial Services, was in talks with the government-backed Japan Bank for International Co-operation.
Local media reports said that it had applied for a 200bn-yen ($2bn; £1.45bn) loan. However, Toyota said no details had been decided.
Toyota has said it expects to report its first annual loss since 1950.
The Japan Bank for International Co-operation was set up last year to help struggling Japanese businesses.
Japan's Finance Ministry said earlier on Tuesday that it would provide an additional $5bn to the bank from its foreign exchange reserves.
'Not in danger'
Toyota Financial Services does 70% of its business in the US, where the credit crunch has made it harder to offer financing and the economic downturn has hit demand for vehicles.
General Motors' financing arm, GMAC, has been hit by losses and has received a $6bn bail-out from the US government.
Analysts said that the news did not mean that Toyota was in trouble.
"Toyota is not in danger. It's out to get the lowest price for funding that the strength of its credit can get," said Yasuaki Iwamoto, an analyst at Okasan Securities, told Reuters news agency.
"On the balance sheet, it doesn't matter if the funds are private or public."
Reports also said that Nissan was considering various types of government aid.
Toyota ended GM's 77-year reign as the world's largest carmaker last year, as its sales surpassed its US rival.
03-03-09, 08:18 PM
#2
Toyota didn't request government loan, Toyota financial did. Huge difference there. Toyota financial to Toyota is like GMAC to GM.
The economy tanked, people lost jobs, with no jobs there goes the ability of paying their car loans. When people are not paying, who's taking the lose? Yeah, you guessed it right, the financial institutions...
The economy tanked, people lost jobs, with no jobs there goes the ability of paying their car loans. When people are not paying, who's taking the lose? Yeah, you guessed it right, the financial institutions...
03-03-09, 08:55 PM
#4
To answer you question: Toyota does.
On top of that:
On top of that:
Toyota Financial Services does 70% of its business in the US, where the credit crunch has made it harder to offer financing and the economic downturn has hit demand for vehicles.
General Motors' financing arm, GMAC, has been hit by losses and has received a $6bn bail-out from the US government.
Analysts said that the news did not mean that Toyota was in trouble.
"Toyota is not in danger. It's out to get the lowest price for funding that the strength of its credit can get," said Yasuaki Iwamoto, an analyst at Okasan Securities, told Reuters news agency.
"On the balance sheet, it doesn't matter if the funds are private or public."
Reports also said that Nissan was considering various types of government aid.
General Motors' financing arm, GMAC, has been hit by losses and has received a $6bn bail-out from the US government.
Analysts said that the news did not mean that Toyota was in trouble.
"Toyota is not in danger. It's out to get the lowest price for funding that the strength of its credit can get," said Yasuaki Iwamoto, an analyst at Okasan Securities, told Reuters news agency.
"On the balance sheet, it doesn't matter if the funds are private or public."
Reports also said that Nissan was considering various types of government aid.
03-04-09, 10:49 AM
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03-04-09, 11:58 AM
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Honda now doing the same thing:
Honda Motor Co. (7267.TO) said Wednesday it is seeking a government loan to help shore up funds at its U.S. operations, becoming the latest Japanese automaker to ask for Tokyo's help in doing business abroad.
Its announcement comes a day after the financial arm of Toyota Motor Corp. (7203.TO), the world's largest auto maker by sales, said that it is in talks with Japan Bank for International Cooperation to line up financing.
Unlike their U.S. counterparts, Japanese car makers have plenty of cash on hand, even though they are all forecasting losses or sharply lower profits for this fiscal year due to plummeting global demand.
But the seizing-up of U.S. credit markets means they are having trouble raising dollar funds, which they'd like to use to extend auto loans to customers in the American market.
They are hoping that more lending in the U.S. will help their sagging sales there recover at a time when consumers in the world's biggest auto market are finding it hard to borrow for auto purchases due to tight credit conditions.
Enter the Japanese government: it will be offering $5 billion in loans via the semi-governmental JBIC to firms that need foreign funds, and it's taking other steps to help firms through a global credit crunch.
JBIC declined to say whether it would extend loans to auto makers or which company it would likely lend to first. A spokesperson for the bank said it can't comment on individual loan deals.
Honda, Japan's second biggest automaker by sales volume, said a loan from JBIC would help it shore up funds for its auto loan operations in the U.S.
Both Honda and Toyota said they haven't finalized the amount of money they want to borrow. But business daily the Nikkei reported that Honda intends to seek tens of billions of yen in dollar-denominated loans while Toyota is negotiating a five-year loan of about Y200 billion.
Nissan Motor Co. (7201.TO), Mazda Motor Co. (7261.TO) and Mitsubishi Motors Corp. (7211.TO) have also said that they are considering seeking Japanese government loans to beef up their cash positions amid tight credit conditions, though they haven't specified how they would use the funds.
Plenty Of Cash Japanese companies like Toyota and Honda are in a different boat from their U.S. counterparts General Motors Corp. and Chrysler LLC, who are asking for government money to stay afloat.
"U.S. car makers such as GM are seeking government fund aid as they could run out of operating funds anytime. ... But the aim of using government loans (for Honda and Toyota) would be strategic moves" to boost sales, said Yasuaki Iwamoto, an analyst at Okasan Securities.
Indeed, Japan's major automakers still have plenty of cash - at least of the Japanese kind.
Toyota held cash and cash equivalent worth Y1.730 trillion and Honda's total came to Y739.41 billion at the end of December. Those figures are higher than their respective annual net profits in recent years.
Toyota also has the highest credit rating among Japanese firms, with an Aa1 from Moody's Investors Service, the second highest grade. Honda has a relatively high Aa3 rating.
But in spite of their healthy balance sheets, the global financial crisis is complicating their dollar fund-raising.
Honda, for instance, wasn't able to issue any asset-backed securities in the U.S. for seven months since June. But at the end of December its U.S. financial unit was finally able to launch $300 million worth of ABS and another $1 billion in the following month, Honda's Chief Financial Officer Yoichi Hojo said last month.
In its latest fund-raising exercise, Toyota in late February issued a relatively large Y200 billion worth of straight bonds in Japan.
By increasing reserves for auto loans, Honda and Toyota would likely be able to lend to new customers with good credit ratings to whom other auto financing companies aren't extending loans because of the credit crunch, he said.
Any pick-up in their U.S. sales would be a big help for their earnings, as the U.S. is their biggest market in the world.
U.S. sales made up about 40% of Honda's global sales and 30% of Toyota's worldwide sales.
But the deepening recession in the U.S. has dragged down sales there. Toyota's U.S. sales tumbled 40% on year in February and Honda's sales there sank 38%, according to monthly sales data released Tuesday.
-By Yoshio Takahashi, Dow Jones Newswires; 813-5255-2929; yoshio.takahashi@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?...X4jyCGVA%3D%3D. You can use this link on the day this article is published and the following day.
Its announcement comes a day after the financial arm of Toyota Motor Corp. (7203.TO), the world's largest auto maker by sales, said that it is in talks with Japan Bank for International Cooperation to line up financing.
Unlike their U.S. counterparts, Japanese car makers have plenty of cash on hand, even though they are all forecasting losses or sharply lower profits for this fiscal year due to plummeting global demand.
But the seizing-up of U.S. credit markets means they are having trouble raising dollar funds, which they'd like to use to extend auto loans to customers in the American market.
They are hoping that more lending in the U.S. will help their sagging sales there recover at a time when consumers in the world's biggest auto market are finding it hard to borrow for auto purchases due to tight credit conditions.
Enter the Japanese government: it will be offering $5 billion in loans via the semi-governmental JBIC to firms that need foreign funds, and it's taking other steps to help firms through a global credit crunch.
JBIC declined to say whether it would extend loans to auto makers or which company it would likely lend to first. A spokesperson for the bank said it can't comment on individual loan deals.
Honda, Japan's second biggest automaker by sales volume, said a loan from JBIC would help it shore up funds for its auto loan operations in the U.S.
Both Honda and Toyota said they haven't finalized the amount of money they want to borrow. But business daily the Nikkei reported that Honda intends to seek tens of billions of yen in dollar-denominated loans while Toyota is negotiating a five-year loan of about Y200 billion.
Nissan Motor Co. (7201.TO), Mazda Motor Co. (7261.TO) and Mitsubishi Motors Corp. (7211.TO) have also said that they are considering seeking Japanese government loans to beef up their cash positions amid tight credit conditions, though they haven't specified how they would use the funds.
Plenty Of Cash Japanese companies like Toyota and Honda are in a different boat from their U.S. counterparts General Motors Corp. and Chrysler LLC, who are asking for government money to stay afloat.
"U.S. car makers such as GM are seeking government fund aid as they could run out of operating funds anytime. ... But the aim of using government loans (for Honda and Toyota) would be strategic moves" to boost sales, said Yasuaki Iwamoto, an analyst at Okasan Securities.
Indeed, Japan's major automakers still have plenty of cash - at least of the Japanese kind.
Toyota held cash and cash equivalent worth Y1.730 trillion and Honda's total came to Y739.41 billion at the end of December. Those figures are higher than their respective annual net profits in recent years.
Toyota also has the highest credit rating among Japanese firms, with an Aa1 from Moody's Investors Service, the second highest grade. Honda has a relatively high Aa3 rating.
But in spite of their healthy balance sheets, the global financial crisis is complicating their dollar fund-raising.
Honda, for instance, wasn't able to issue any asset-backed securities in the U.S. for seven months since June. But at the end of December its U.S. financial unit was finally able to launch $300 million worth of ABS and another $1 billion in the following month, Honda's Chief Financial Officer Yoichi Hojo said last month.
In its latest fund-raising exercise, Toyota in late February issued a relatively large Y200 billion worth of straight bonds in Japan.
By increasing reserves for auto loans, Honda and Toyota would likely be able to lend to new customers with good credit ratings to whom other auto financing companies aren't extending loans because of the credit crunch, he said.
Any pick-up in their U.S. sales would be a big help for their earnings, as the U.S. is their biggest market in the world.
U.S. sales made up about 40% of Honda's global sales and 30% of Toyota's worldwide sales.
But the deepening recession in the U.S. has dragged down sales there. Toyota's U.S. sales tumbled 40% on year in February and Honda's sales there sank 38%, according to monthly sales data released Tuesday.
-By Yoshio Takahashi, Dow Jones Newswires; 813-5255-2929; yoshio.takahashi@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?...X4jyCGVA%3D%3D. You can use this link on the day this article is published and the following day.
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