SEPTEMBER 2004

Toyota Financial Set to Expand
U.S Consumer Lending

By gaining approval in August from the Federal Deposit Insurance Corp to set up a bank in the U.S., Toyota Financial Services corporation has embarked on a plan to gradually roll out a range of consumer financial services, including credit cards and unsecured loans. By doing so it will be joining financial services giants GMAC and Ford Motor Credit as a "captive auto finance" division of a major car maker that has moved beyond making secured automobile loans. Toyota Financial Services currently has $46 billion in assets, compared to $300 billion in assets for GMAC and $129 billion for Ford Motor Credit. However, unlike its larger counterparts, profits from Toyota Financial comprise only a small portion (6%) of the parent company's overall profits. In contrast, GMAC accounted for 62% of GM's net income in 2003, while Ford Motor Credit contributed 95% of Ford's profits. Toyota hopes to capitalize on an outstanding corporate credit rating and an existing base of 2.3 million auto loan and extended warranty customers in the U.S. to boost profits and build brand loyalty by establishing multiple financial relationships with customers.