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Toyota's loan unit seeks funds

TOYOTA Motor Corp's financing unit is in talks with a Japanese government-backed bank on possible lending, the auto maker said yesterday, underlining the serious woes facing the car industry amid plunging global sales.

Toyota 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 (US$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.

Toyota Financial Services does 70 percent of its business in the United States, 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 that it does not comment on individual company matters.

The Finance Ministry said yesterday that it will provide an additional US$5 billion from its foreign reserves this month to the Japanese bank, to make sure there is ample cash available for needy businesses. Tokyo has about US$1 trillion in foreign reserves.

More funds available

Finance Minister Kaoru Yosano also said that 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 firms ride out the deepening global slump.

Toyota, which makes the Camry sedan and the Prius hybrid, had been growing solidly before the US 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 faring better than American car makers, which asked for US$21.6 billion more in aid last month.


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