captive
The Q1 report issued by Toyota Motor Corporation for the three
months ended June 30 2008 showed that its Toyota Financial Services
(TFS) division has been hit by credit losses, especially in the US,
with pre-special item operating income down by JPY21.8bn (£104m)
quarter on quarter, to JPY23.6bn (£112m), a fall of 51 per
cent.
However, the captive was able to show a profit on paper thanks to a
valuation profit of JPY55.5bn (£264m) on interest rate swap
transactions, lifting its operating income to JPY79.1bn
(£376m).
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Although lending margins were reportedly higher, residual value
losses due to declining used car prices, bad debt, and credit
losses in the US all had an adverse effect on TFS’s
results.
“However, with Toyota’s traditionally prudent approach in
lending, together with its efforts to further strengthen the credit
control and collection system, the percentage of credit losses has
shown some stability,” Toyota said.
The manufacturer predicted it will sell around 8.74m units in the
12 months to March 31 2009. Its fiscal projections for the year
remain unchanged, and Toyota predicts it will earn net income of
JPY1.25trn (£5.9bn) this financial year.
Jo Tacon
