Toyota Motor Corp. announced Tuesday it will establish a wholly owned subsidiary in July to oversee the management of Toyota finance companies worldwide.
The new company, Toyota Financial Services Corp., to be capitalized at 117 billion yen, will seek to maximize the competitiveness of Toyota’s financial businesses and streamline the decision-making processes, the No. 1 Japanese automaker said.
A total of 16 finance units, in Japan, the United States, Britain and other countries, will come under the umbrella of Toyota Financial Services, officials said. These include Toyota Finance Corp. in Japan, Toyota Motor Credit Corp. in the United States and Toyota Motor Finance (U.K.) PLC.
Speaking at a press conference in Nagoya, however, Toyota Motor President Fujio Cho said the carmaker had no plans to take Chiyoda Fire & Marine Insurance Co., whose top shareholder is Toyota Motor, under the wing of the new finance control unit.
Chiyoda Fire plans to merge with Dai-Tokyo Fire & Marine Insurance Co. next April to create Japan’s fifth-largest nonlife insurer.
Concurrently, Toyota will set up Toyota Financial Services Securities Corp. as a Toyota Financial Services unit in July to enhance services for customers, such as credit-card holders, scheduled to be issued by Toyota from April 2001, it said.
The New Toyota Card will be an advanced credit card to be issued as an “attractive alternative” featuring a fully enhanced “cash back” system and other car-owner-related services, the officials said.
Toyota Financial Services’ operations are expected to begin next April to coincide with the launch of the credit card.
Toyota Financial Services Securities will also sell investment trusts, also known as mutual funds, to customers, the automaker said.
Toyota said it hopes to expand its global network of finance companies to 30 countries or more.
Coordinated operations under the new subsidiary will enhance Toyota Motor’s risk management and fundraising operations.
But Cho denied speculation that the move represents the auto giant’s bid to make a full-scale foray into Japan’s banking and securities sectors.
The securities unit will offer investment trusts to card holders with cash management accounts, but Toyota Motor has no plans to expand the scope of the unit’s business to include banking, equity and bond retail and corporate bond issuance services, he said.
Toyota Motor Senior Managing Director Ryuji Araki, who was also at the Nagoya press conference, said the automaker hopes to eventually develop investment trust products of its own.
Araki also unveiled plans to handle insurance products of Chiyoda Fire and other nonlife insurance firms through the securities unit.