Crisis-hit Japanese car company Toyota Motor has asked for a $2 billion (Dh7.3bn) government loan to help its financial unit ride out the credit crunch, an official said yesterday.
Toyota Financial Services, which provides loans to car buyers, is in consultations with the Japan Bank for International Co-operation (JBIC) but the size of the loan has not been decided, said company official Mio Sugito. "The move is aimed at diversifying our financial resources as the international financial market is getting tighter, especially in the United States," said Sugito.
The Nikkei daily and other media reported that Toyota's wholly owned financial subsidiary is asking for about 200bn yen (Dh7.5bn).
They said the money would be used to support its operations in the United States. The move comes amid concerns that firms are finding it increasingly hard to raise funds from distressed markets and cash-strapped banks.
Analysts said Toyota does not face an immediate cash crunch like its US rivals such as General Motors. "This is not like the case of GM," said Yasuaki Iwamoto, analyst at Okasan Securities.
"This is a positive strategy in which Toyota intends to use its credibility to secure cash flows so that it can cope with the tough situation in the United States." JBIC's main role is to invest in projects in developing countries, but the government in December decided as an emergency measure to allow the bank to lend to Japanese companies operating in developed countries.
Investors reacted calmly.
Toyota's share price declined 10 yen or 0.33 per cent to 3,060 yen, outperforming a 0.69 per cent decrease in the benchmark Nikkei index yesterday.