Toyota 2006 Annual Report Download - page 42

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40
Financial Services Operations
Business Overview
Financing volume and revenues up due
to robust automotive sales
In fiscal 2006, operating income
declined because of such factors as the
valuation losses on interest rate swaps
stated at fair value that offset a large
increase in revenues from financial
services operations associated with
higher financing volume.
Toyota’s financial services opera-
tions play a vital role—underpinning
the growth of the Company’s core
automotive operations. Because car
purchases often require auto loans,
delivering superior quality auto sales
financing is a key part of competitive
marketing. Covering 31 countries and
regions, including Japan, financial ser-
vices operations center on Toyota
Financial Services Corporation (TFS),
which has overall control of financial
services subsidiaries in Japan and
overseas. TFS has constructed a global
network that covers approximately
90% of the markets in which Toyota
sells its vehicles.
At present, TFS provides financial
services related to vehicle purchases
and leases to approximately 6 million
customers worldwide. Further, TFS
has the highest credit rating of U.S.
rating agencies Standard & Poor’s
and Moody’s. Backed by such solid
creditworthiness, TFS provides ser-
vices customers trust.
Business Strategy
Offer one-stop financial services
centered on auto sales
In addition to auto sales financing,
the TFS Group is focusing on offering
comprehensive financial services that
closely reflect customers’ lifestyle
needs. Particularly in Japan, the group
provides wide-ranging financial ser-
vices that include auto sales financ-
ing, retail sales of corporate bonds
and investment trusts, asset develop-
ment services for individuals, housing
loans, and insurance. For example,
Toyota Financial Services Securities
Corporation offers Toyota Group cor-
porate bonds and securities with high
credit ratings denominated in foreign
currencies, mainly those issued by the
World Bank (International Bank for
Reconstruction and Development)
and other institutions.
In addition, Toyota Finance Corpora-
tion released the TS CUBIC CARD in
2001, aiming to create a more acces-
sible and convenient credit card by
incorporating functions and services
not normally available from credit
cards. The TS CUBIC CARD had approx-
imately 5.4 million cardholders at fis-
cal year-end. Also, Toyota Finance
Corporation has the largest joint ETC
(electronic toll collection) member-
ship—1.7 million cardholders at fiscal
year-end—in the domestic ETC card
industry.
Business Overview
3,000
9,000
6,000
12,000
’02 ’03 ’04 ’05 ’06
FY
Total Assets by Financial
Services Operations
(¥ Billion)
0
Overview of Toyota’s Financial Services
Operations FY 2006
Total financial services
segment assets........... ¥11,613.5 billion
Revenues from financial
services operations ........ ¥996.9 billion
Operating income ......... ¥155.8 billion
Credit ratings .............. AAA /Aaa
Operating areas .......... 31 countries and
regions worldwide
Market coverage .......... approx. 90%
No. of customers.......... approx. 11 million
No. of employees ......... approx. 8,000
Financial Services Operations Organization
100
%
33.4
%
100% 100% 50% 50% 100%
Toyota Accounting
Service Co.
Overseas Sales
Finance Companies
Toyota Finance
Corporation
Toyota Financial Services
Securities Corporation
Toyota Financial
Services Corporation
Toyota Motor
Corporation
Toyota Asset
Management Co., Ltd.
Aioi Insurance
Co., Ltd.
Our global auto sales financing network encompassing 31 countries and regions provides high-quality
financial services to customers seeking to purchase Toyota vehicles.