Toyota Motor Corp has aimed for a return on assets (ROA) of 1.5 to 2% at its financial services business as it expands its auto-loans business globally.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Hideto Ozaki, president of Toyota Financial Services Corp. (TFS), the automaker’s wholly owned finance arm, told Reuters the company had total assets of about 9 trillion yen ($US86 billion) now, with an ROA of above 1.5%. That would translate to an annual operating profit of at least 135 billion yen, compared with the 106.2 billion yen in the year that ended in March at an ROA of 1.3%.
“Anything less than 1.5% would be inefficient and anything above 2% would mean we’re charging too much in interest rates,” Ozaki told the news agency.
Reuters noted that Toyota’s earnings from its finance operations have ballooned in the past few years as its car sales surge in all major markets. It offers auto loans in 27 countries – covering 90% of its car markets – with operations due to begin China, South Korea and Slovakia by next March.
“What we need to do now is to improve our services so that at least half of our customers who use credit to buy cars do so through our own auto loans all over the world,” Ozaki told Reuters.
He reportedly noted that roughly two-thirds of Toyota’s customers around the world buy cars using some form of credit, with slightly more than half of that on average utilising Toyota’s auto loans.
But while in developed countries like Germany, Canada and the United States the figure is at least 65%, performance in many markets remained sub-par, he told Reuters.
