In order to cater to the car financing requirements of its clients, Japanese automotive giant Toyota has launched Toyota Financial Services India (TFSI) in the country. On the back of initial investment of Rs. 260 crores, its operations will commence from Delhi and NCR and will reach other metropolitan cities by the end of the ongoing financial year. This new company will be a completely owned subsidiary of Toyota Financial Services Corporation (TFSC).
Kazuki Ogura, Managing Director and Chief Executive Officer (CEO), TFSI, stated, "We will start the retail business from June 5 through dealerships in Delhi, NCR and Bangalore. The initial investments for starting the financial services in Rs 260 crore." Responding to a query regarding the additional investments for the domestic market, Ogura commented, "The aim is to reach to other metro cities within this fiscal." India will be the 34th country in the world where Toyota will render car financing services.
The emphasis of TFSI will be on providing the domestic clientele of Toyota with loans at rates similar to those prevalent in the country, which are close to 12 to 12.5 per cent at present. Across the world, TFSC, which has a workforce of 8400 personnel, caters to approximately 17 million consumers and has assets valued over $ 150 billion.
Eiji Hirano, Executive Vice-President, Toyota Financial Services Corporation, commented, "Globally, we are not the least when it comes to interest rates. Yet, we have the best penetration rates in markets like US and China through our overall financial package." About the Indian market, he stated, "India is a market full of opportunities...by 2015 it is estimated that the car market here will touch four million units (a year). It is the right time to enter India at this moment."
Answering a question regarding the increase in sales that the Japanese car maker anticipates upon the introduction of the financial services division in India, Hiroshi Nakagawa, Managing Director of Toyota Kirloskar Motor, said, "It is too early to say but this will definitely help us enhance the Toyota brand even further."
Regarding the deregulation of diesel prices in the country, Nakagawa commented, "This is not healthy. We expect the government to take some action." According to him, this has created an imbalance in the domestic passenger vehicle market as the demand for petrol vehicles is declining steadily. He believes that the cost of fuels in the country should be directly connected to the global market, which is the trend across the world. While the per km running cost for petrol in India stands at Rs. 5.22, it is Rs. 2.15 for diesel cars.
