Toyota 2015 Annual Report Download - page 36

Toyota established a wholly-owned subsidiary, Toyota Financial Services Corporation (“TFSC”), to oversee the
management of Toyota’s finance companies worldwide, through which Toyota aims to strengthen the overall
competitiveness of its financial business, improve risk management and streamline decision-making processes.
Toyota has expanded its network of financial services, in accordance with its strategy of developing auto-related
financing businesses in significant markets. Accordingly, Toyota currently operates financial services companies
in 36 countries and regions, which support its automotive operations globally.
Toyota’s revenues from its financial services operations were ¥1,896.2 billion in fiscal 2016,
¥1,661.1 billion in fiscal 2015 and ¥1,421.0 billion in fiscal 2014. In fiscal 2015, amid a gradual recovery in
markets mainly in the United States, Toyota collaborated with dealers in various countries and regions, and the
balance of loan receivables increased steadily. In fiscal 2016, although economic weakness was seen in areas
such as Asia, including China, recovery in the United States, among other places, continued. In such an
environment, as a result of Toyota’s continued collaboration with dealers in various countries and regions and
efforts to expand products and services that meet customer needs, Toyota’s share of financing provided for new
car sales of Toyota and Lexus vehicles in regions where TFSC operates remained at a high level of 36% and the
balance of loan receivables, mainly in the United States, continued to increase steadily. Meanwhile, Toyota is
making efforts to provide both its customers and dealers with stable financial services by diversifying its funding
mechanisms with ABCP (Asset Backed Commercial Paper) and ABS (Asset Backed Securities), in addition to
mid- to long-term financings, primarily in commercial paper issuances, corporate bonds and bank borrowings.
Toyota continued to perform detailed credit appraisals and serve customers by monitoring bad debt and loan
payment extensions, and the percentage of credit losses remained low, at 0.36% and 0.31% in fiscal years 2016
and 2015, respectively. Toyota continues to work towards improving its risk management measures in
connection with credit and residual value risks.
Toyota Motor Credit Corporation is Toyota’s principal financial services subsidiary in the United States.
Toyota also provides financial services in 35 other countries and regions through various financial services
subsidiaries, including:
• Toyota Finance Corporation in Japan;
• Toyota Credit Canada Inc. in Canada;
• Toyota Finance Australia Ltd. in Australia;
• Toyota Kreditbank GmbH in Germany;
• Toyota Financial Services (UK) PLC in the United Kingdom;
• Toyota Leasing (Thailand) Co., Ltd. in Thailand; and
• Toyota Motor Finance (China) Co., Ltd. in China.
Toyota Motor Credit Corporation provides a wide range of financial services, including retail financing,
retail leasing, wholesale financing and insurance. Toyota Finance Corporation also provides a range of financial
services, including retail financing, retail leasing and credit cards. Toyota’s other finance subsidiaries provide
services including retail financing, retail leasing and wholesale financing.
In April 2013, Toyota established Toyota Financial Services Kazakhstan MFO LLP, a financial services
company, in Kazakhstan, which began operations in January 2014. In addition, in June 2016, Toyota established
Toyota Financial Services Portugal Limited, a financial services company, in Portugal as a branch of Toyota
Kreditbank GmbH.
Net finance receivables for all of Toyota’s dealer and customer financing operations were ¥14,555.6 billion
as of March 31, 2016, representing a decrease of 5.9% as compared to the previous year. The majority of
Toyota’s financial services are provided in North America. As of March 31, 2016, 59.1% of Toyota’s finance
receivables were derived from financing operations in North America, 11.9% from Asia, 10.3% from
Europe, 8.3% from Japan and 10.4% from other areas.
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