TOKYO - Toyota Motor Corp.'s financial operations accounted for 4.5 percent of worldwide revenue last fiscal year and a like percentage of its operating profit before taxes and extraordinary items.
That means profits of about ¥35.1 billion, or about $265.9 million at current exchange rates, on revenue of about $4 billion. Those figures are poised to grow, as Toyota's financing operations in Japan begin to adapt practices fine-tuned by Toyota Motor Credit Corp. in the United States.
Yet Toyota insists it doesn't want to build a financial services empire. Toyota President Hiroshi Okuda has insisted often that the company is not entering the financial sector.
'Methinks the company doth protest too much,' said Stephen Usher, Tokyo-based senior analyst at Jardine Fleming Securities (Asia) Ltd.
Consider insurance. Until last year, car insurance premiums were regulated heavily in Japan. Discounts based on a driver's safety record or age were banned.
Those rules have been lifted. Now, Toyota offers lower premiums to buyers of its cars, claiming that the vehicles' body structures make them safer than competitors' cars and trucks.
To bolster its use of insurance as a marketing weapon, Toyota in September spent $200 million to raise its stake in Chiyoda Fire & Marine Insurance from 37 percent to 47 percent.
In the United States, Toyota Motor Credit offers a wide range of financing services to Toyota's dealers and customers. It has paid-in capital of $915 million and raised $2 billion in funds on the credit markets in the last month alone to expand.
That dwarfs Toyota's Japan-based finance arm, with its $25 million in paid-in capital. But as Japan further deregulates, the opportunities will increase for Toyota to use the financing lessons it has learned in America to move the iron at home.