Toyota Motor has asked two leading Japanese banks to set up a line of credit totaling JPY1 trillion (US$9.2bn), according to local reports citing company sources.
The move signals the carmaker’s concerns over rising funding costs as global vehicle demand continues to plunge due to the COVID19 coronavirus.
While Toyota’s financial base is seen as solid, the company is said to be looking to strengthen its cash position in preparation for any further escalation in the virus epidemic.
The carmaker previously announced the temporary closure of a number of vehicle assembly plants worldwide over the last two months due to the global health crisis, most recently in North America and Japan, as well as in Europe and China. Overall vehicle demand has fallen sharply in all major regional markets since the start of the year.
The two Japanese banks, Sumitomo Mitsui Banking Corp and MUFG Bank, are expected to accept Toyota’s request for additional funding. The new facilities would allow Toyota to borrow up to JPY500bn from each of the banks if and when required.
According to its latest financial report, Toyota had around JPY5.2 trillion in cash and deposits at the end of last year.
Other Japanese vehicle manufacturers are also likely to have concerns over future funding requirements given the current uncertainty over the global economy.