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Cars and Drivers

Even Toyota (TM) Needs A Loan

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By Douglas A. McIntyre Updated Published
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It was never supposed to come to this. The global recession has hurt car companies with weak balance sheets such as GM (GM) and Nissan and forced them to turn to their governments for financial assistance. But not Toyota (TM). It was too well run and had too strong a balance sheet. Until now.

According to Reuters,  “Toyota Motor Corp has applied for a loan backed by the Japanese government to help its finance arm cut funding costs as the global crisis tightens access to credit.” Because of its relative financial help the largest car company in the world will have access to the capital at low interest rates.

In a perverse way, the news may be good. A strong financial arms means that Toyota may be more willing and able to extend loans to consumers as their appetite for buying cars returns. That is becoming more likely to happen as the age of the average car increases and tax rates are lowered under programs in the new budget.

If one car company is likely to recover before any other, it is Toyota because of its huge distribution network, reputation for quality, and fuel efficient vehicles.

Having some extra cash in the bank will help

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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