On The Edge? Report Indicates Toyota May Be Running Short On Cash

What large, multinational corporation does not have lower cash reserves and more debt right now?

— david999 (View Profile)

Posted on 1/27/2009 12:02:32 PM | reply to this comment | Votes: -3   

Apple as well, cash flow for them is not totally dependent on moving hardware.

— Agent009 (View Profile)

Posted on 1/27/2009 12:50:20 PM | reply to this comment | Votes: 1   

Thats what you get when you offer 0% finance on all/most of your models...Talking with fellow sales people, we seemed to agree, how can a company make money on lending so-called "free" money, you don't because there is nothing for free when it comes car loans...someone somewhere is paying down to 0%...and Toyota is paying the price. And if you looked at the Decemeber numbers...it didn't even help.

— Doukas (View Profile)

Posted on 1/27/2009 1:00:15 PM | reply to this comment | Votes: 1   

Toyota needs faster turnovers... ie., new car purchases, but since their products last forever and never breakdown, people are just riding out the bad economy and delaying purchasing. This kind of business strategy works for BMW though, as people "need" to trade it in before the warranty runs out :)

— sector (View Profile)

Posted on 1/27/2009 1:20:50 PM | reply to this comment | Votes: -1   

As the saying goes "The bigger you are, that harder the fall"...Look what happend to the Big 3...but their situation is not only the economy but more so the Management/Execs ignorance that also played a huge roll for the Big 3. Toyota maybe be strapped on cash for now, but what has been spent interms of loans or investments into the right R&D will quickly pay back, once the economy gets rollin' again by the end of 09'(hopefully!)...In Toyota's case, they can afford to give the free financing when need be, but it does not mean this will solve all it's problems. It avoids their current inventory to be stagnant and barely breaking even. In terms of bouncing back in this tough time of the automotive sector, Ford and Toyota will become the lone survivors for the long term...considering Toyota was once known(or still is) the bank of autos...if Toyota does bad then for sure every other automotive company is doing that much worse! Proof is in the pudding! Good luck to all!

— BigShow50 (View Profile)

Posted on 1/27/2009 1:32:02 PM | reply to this comment | Votes: 0   

you should follow their lead!

— 0to60 (View Profile)

Posted on 1/27/2009 2:37:30 PM | reply to this comment | Votes: 4   

Unlike the article (from Detroit, BTW) I'll post some numbers putting things in perspective and you guys and gals will explain me how can anyone say Toyota is "on the edge", OK? Let's go, in millions of USD ||| 2008 Ford Motor Company total assets: 279,264 total liabilities: 273,636 net income: -2,723 ||| 2007 General Motors total assets: 148,883, total liabilities: 185,977(!!!), net income: -38,732(!!!) ||| 2007 Volkswagen AG, in millions of EUR, total assets 48,432 total liabilities 15,595 OPERATING income 1,940 ||| 2008 Toyota Motor Corporation, in millions of USD, total assets 323,970 total liabilities more or less 200,000 net income 17,150

— downtoearth (View Profile)

Posted on 1/27/2009 1:39:51 PM | reply to this comment | Votes: 1   

The title of the article is misleading. Toyota is not "running short on cash". The article indicates that Toyota may be close to having to dip into their ($18.5 billion) cash reserves. That certainly does not mean that they are anywhere close to being short on cash.

— BSBB (View Profile)

Posted on 1/27/2009 1:50:23 PM | reply to this comment | Votes: 7   

Doukas,
I believe you've mistaken Toyota for GM or BMW. Toyota has only had 0% for 3 months, BMW has had it for over a year now. Toyota owners (yes, owners) can keep their cars much longer (without fear of breakdowns) so they delay their purchases. BMW renters have to get rid of their crapboxes before they get stuck with an inflated residual because of their backloaded leases.

Gotta love how this article uses Yen when announcing all the "bad" numbers so they appear in trillions but when it comes to money in the bank, they suddenly switch to USD to list it in billions.

— huu76 (View Profile)

Posted on 1/27/2009 2:16:57 PM | reply to this comment | Votes: 1   

Hey ChumpG37, here's an interesting saying I found and it made me think of you immediately after I read it.. "If Only Closed Minds Came With Closed Mouths" and my personal favorite "I Wish Stupid Were Painful".

— Lemonade (View Profile)

Posted on 1/27/2009 5:32:39 PM | reply to this comment | Votes: 1   

A big increase is in reality always followed by a big decrease - the higher you rise, the higher you will fall. Evolutions principle since the beginning of our planet. As for Toyota: They struggle like everybody else, and their ovverrated Lexus brand will fall even more (unfortunately we will not see the numbers in terms of profit and / or loss, because they are hidden under the wings of Toyota). But you can be sure about one thing: 1. in case of Audi, Mercedes, BMW, they will probably each have unneeded production capacity of round about 200.000 cars each (20% of 1 million cars produced) 2. in case of Toyota, with unnecessary production capacity for approximately 1.700.000 cars (diff. between 8.2 million and 6.5 million cars, 20% would be 1.600.000), that is a total different story My 2 cents are that the small companies will be stronger after this - as they can respond easier - and the big ones will suffer more.

— agent507 (View Profile)

Posted on 1/27/2009 3:19:07 PM | reply to this comment | Votes: -1   

These are just rumors, The entire world knows that the world's richest automaker is not running short on cash flow, even if so, then so is everybody else....

— iLexus (View Profile)

Posted on 1/27/2009 3:40:09 PM | reply to this comment | Votes: -4   

Just because Toyota is #1 right now doesn't mean that if they are running short on cash that everyone else is too, the amount of money a company makes is tied to more than just the number of cars they sell, it is also determined by things like profit margins, debt, management decisions, and other things. In short, the entire auto market does not move to the beat of one Toyota.

— BlakuraTLS (View Profile)

Posted on 1/27/2009 4:29:58 PM | reply to this comment | Votes: 2   

When it comes to having a small cock, women are more likely to bang you when you look like a poser? At least that's what I got from your post. Cheers!

— Kthorn (View Profile)

Posted on 1/28/2009 12:13:34 AM | reply to this comment | Votes: 3   

Allot of Bashing as usual. Toyota is a fine company that created a great business model used the World over. Also the Japanese automakers forced other competitors to increase quality and reliability for the consumers in order to compete.

I blame the current state of the BIG 3 on its Management and also the greed of the US financial Institution that helped create this mess. ALL major Automakers rely heavily on the US Auto Market and hopefully we can all feel safe to spend again :)

— Porschinator (View Profile)

Posted on 1/27/2009 6:29:37 PM | reply to this comment | Votes: 1   

Ford BORROWED $23B in 2006
That's the ONLY reason they don't have their hands out now
They beat everyone to the punch!

So comparing Ford's loan proceeds (In the Red) to Toyota's safety net, is like comparing the New York Subways to The Bullet Train
Glad to see they tell you the whole story here
Well done!
DrFill

— TheRealDrFill (View Profile)

Posted on 1/27/2009 10:14:58 PM | reply to this comment | Votes: 5   

In all honesty I doubt this is true, also there are no other reports besides this one about this topic.

— 1UAW (View Profile)

Posted on 1/28/2009 9:11:06 AM | reply to this comment | Votes: 1   

Some dudes just made it up i bet!

— mpls (View Profile)

Posted on 1/28/2009 4:01:47 PM | reply to this comment | Votes: 1   

Actually, Apple has been seeing a huge drop in profits as their products are quite expensive compared to the alternatives... But it's true... It isn't like they are headed towards the abyss in any way!

Apple just had their biggest quarter in their history and added to their cash, thats with spreading out their iPhone profit out over 24 months, or it would have been bigger. Don't know where you get your information. They also have the biggest margins in the industry, they are in a good position.
http://www.macrumors.com/2008/10/21/apple-reports-1-14-billion-profit-for-q4-2008/

I think in a year, all the auto manufacturers will be in trouble.

— dool (View Profile)

Posted on 1/29/2009 7:14:58 PM | reply to this comment | Votes: 1   

As someone pointed out over at TTAC, Toyota's sales have doubled in the past decade. So as a percentage of sales, their debt load has not increased. As someone here points out, they haven't begun to tap lines of credit and such. They could also issue stock tomorrow, and get a good price for it.

So I'm not concerned about the financial health of Toyota. Let me know when they start dumping brands and selling core assets.

— mkaresh (View Profile)

Posted on 1/29/2009 10:57:56 PM | reply to this comment | Votes: 1   

Guys, take your heads out of the computer. The problem for Detroit, Billancourt, Stuttgart, Hiroshima, and all is CREDIT.

The sky, by the way, IS FALLING!

— LauderdaleDriver (View Profile)

Posted on 1/30/2009 10:37:49 PM | reply to this comment | Votes: 1   

Bimmermike,
BMWusa had 0.9% (basically 0) back in Sept 2007, long before the "live beyond your means" bubble created by leasing and refinancing burst. Perhaps BMW decided there's no point charging 0.9% anymore since posers can't lease right now anyway. 2.9% isn't exactly all that high either.
As for the backlogged leases that allow posers and wannabes to drive off in a me-too BMW, in Canada they're charging 0.9% on used cars (probably because they've sat there for too long) vs. over 8% for Toyota. Shows nobody wants a used car with an inflated price tag. BMWusa is offering the same 0.9% on poser cars.

If you think people buy Toyota's because they're cheap (you might want to actually price one out sometime), then why is BMW constantly making smaller and cheaper models to flood the market with? I'd love to see a survey on how many BMW leases are actually registered with a business, wouldn't surprise me if it was near 0. BMW is synonymous with spoiled or fresh off the boat, both of which make for a poor business image and more than likely bad business sense.

— huu76 (View Profile)

Posted on 2/1/2009 11:03:25 AM | reply to this comment | Votes: 1