On the eve of the release of monthly sales figures in the US market that are expected to show another large fall, Toyota, the world’s biggest car group, has approached the Japanese government for financial help via its financial arm.
Estimates are that US sales fell by more than 40% last month, with some estimates putting the drop at 40%.
Early reports say Ford’s sales fell a huge 48%, Nissan by 37%.Toyota’s plunged 40% in another bad month for the car giant.
General Motors sales plunged by more than half: down 52.9%, thanks to another bad month for car fleets.
Toyota’s sales have been falling by over 30% a month now for several months in the US as it struggles with the same slump that has devastated its US competitors.
Japanese sales have fallen sharply, but exports have plunged because of the global recession. There was a media report overnight that it has leased a ship to store over 2500 cars off a Swedish port because the stockyards are full.
The latest news, which emerged in reports in Tokyo yesterday afternoon, came as a major shock.
It seems Toyota can’t raise enough finance through its car financing arm to offer buyers the funds to buy its cars.
It puts the mighty Toyota on the same footing as the mendicant US car companies, General Motors and Chrysler which are facing bankruptcy if they don’t get more money from Washington.
GM has received $US13.4 billion in and is seeking $US16 billion more to keep its operations in its home market running through this month.
Chrysler has $US4 billion and wants another $US5 billion.
GM last month said it is cutting another 47,000 jobs globally, as it reported a $US30.9 billion annual loss.
Volkswagen, Europe’s largest carmaker, said on the weekend that it will cut all 16,500 temporary jobs globally. It shut five factories in Germany last week.
VW overnight reported a 14% rise in 2008 earnings to $US6 billion. It warned of a much tougher year ahead.
France granted PSA Peugeot Citroen and Renault SA a total of 6 billion euros in loans last month, on the proviso they don’t close plants and bring production home from plants elsewhere in Europe.
In the UK, carmakers are seeking support for their finance units from the Bank of England.
Car parts makers in the US have sought $US25.6 billion in aid from the US Government.
In Japan, fellow car group, Mitsubishi Motors has asked for and received subsidies from Japan’s Ministry of Health, Labor and Welfare to help pay wages, as it cuts domestic production. It has always been the weakest of the Japanese car companies (and used to have a plant in Australia).
Toyota had indicated last weekend that it could cut production 12% in the 2010 financial year, starting April 1.
Nissan has said it sees worldwide vehicles sales dropping 14% to 55 million units this calendar year.
But no one had thought Toyota, which is facing losses of around $US3.5 billion in the financial year ending March 31, would want government aid.
But that’s the gist of the reports coming from Tokyo.
Toyota Motor Corp’s financial unit said that it had asked for an emergency loan from a Japanese government-backed lender to ride out the financial crisis.
Newsagency, AFP reported that Toyota Financial Services, which provides loans to car buyers, is in consultations with the Japan Bank for International Cooperation (JBIC) for a loan, but the size of the loan has not yet been decided.
"The move is aimed at diversifying our financial resources as the international financial market is getting tighter, especially in the United States," AFP quoted a Toyota spokesman as saying.
The Nikkei business daily and the Jiji Press news agency had earlier reported that Toyota’s wholly-owned financial subsidiary is asking for about 200 billion yen ($US2 billion).
If the loan is made it will be JBIC’s first to a Japanese carmaker under a new government scheme, the Tokyo reports said.
AFP said 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.
The money for the loan to Toyota Financial will be part of a concerted plan by the Government to help companies over a end of financial year (March 31) financing hump.
The government will loan $US5 billion to JBIC for on lending to Japanese companies to relieve the pressures caused by the global credit squeeze.
The state bank will extend five-year loans to Japanese companies operating overseas later this month at a rate of interest matching its recent cost of fund-raising, the finance ministry said yesterday.
The loans will be extended to the parent companies in Japan or to their overseas units, but either way will be in dollars, JBIC said.
