Toyota in talks for Japan government loan
Tuesday March 3, 7:51 am ET
By Yuri Kageyama, AP Business Writer Toyota talking with Japan government about loan for finance unit amid projected net loss
TOKYO (AP) -- Toyota's financing unit is in talks with a Japanese government-backed bank on possible lending, the automaker said Tuesday, underlining the serious woes facing the car industry amid plunging global sales.
Toyota Motor Corp. said no details had been decided. Kyodo News and NHK TV reported earlier in the day, without identifying sources, that Toyota's auto loan unit, Toyota Financial Services, had asked for a 200 billion yen ($2 billion) government loan.
A spokesman for Toyota Financial Services said the talks with the Japan Bank for International Cooperation were among the various ways being studied to gain funding. The lender does 70 percent of its business in the U.S., where sales have been plunging and credit tightening.
The Japan Bank for International Cooperation, which started helping cash-strapped Japanese businesses last year as the global financial crisis unfolded, said it does not comment on individual company matters. Some companies have been struggling for cash ahead of the fiscal year end of March 31.
The Finance Ministry said Tuesday it will provide an additional $5 billion from its foreign reserves this month to the Japan Bank for International Cooperation, to make sure there is ample cash available for needy businesses. Tokyo has about $1 trillion in foreign reserves.
Finance Minister Kaoru Yosano also said the ministry stands ready to raise the money pool available for lending in yen from 800 billion yen now to 1.2 trillion yen to help companies ride out the deepening global slump.
Toyota, which makes the Camry sedan and the Prius hybrid, had been growing solidly before the U.S. financial crisis hit last year. But now it is expecting a 350 billion yen loss for the fiscal year through March, as plunging global demand and a strengthening yen batter earnings.
Toyota's projected red ink for the fiscal year through March would mark its first such annual net loss since 1950, and a sharp contrast from the record 1.72 trillion yen profit it racked up the previous year.
Toyota is still faring better than General Motors and Chrysler, which together have received $17.4 billion in emergency loans from the U.S.
government, and asked for an additional $21.6 billion in aid last month.
Nissan Motor Co. has said that it is considering various types of government aid, but it declined to say Tuesday whether it was requesting for Japan Bank for International Cooperation loans. Nissan has forecast a 265 billion yen net loss for the fiscal year through March.
Toyota shares fell 0.3 percent to 3,060 yen. The news of the lending talks broke before trading ended in Tokyo.