4 Mar 2009

Toyota seeks government loan

7:35 am on 4 March 2009

Toyota, the world's biggest carmaker, is seeking a state loan to help its car financing unit.

The company said Toyota Financial Services was in talks with the government-backed Japan Bank for International Co-operation.

Local media reports said that it had applied for a loan of 200 billion yen ($US2 billion) loan. However, Toyota said no details had been decided.

Toyota expects to report its first annual loss since 1950.

The BBC reports the Japan Bank for International Co-operation was set up last year to help struggling Japanese businesses.

The Finance Ministry said earlier on Tuesday that it would provide an additional $5bn to the bank from its foreign exchange reserves.

Toyota Financial Services does 70% of its business in the United States, where the credit crunch has made it harder to offer financing and the economic downturn has hit demand for vehicles.

General Motors' financing arm, GMAC, has been hit by losses and has received a $US6 billion bail-out from the US government.

General Motors and Chrysler have received a total of $US17.4 billion from the US government.