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Credit crunch

By Samantha Stevens, 11 Mar 2009 Industry

Credit crunch

The fractured - nay, broken - American car market has forced Japan's big four to turn to its government for financial assistance.

Toyota has started an undesirable trend in Japan, with carmakers Honda, Mazda and Nissan now looking to borrow bank funds to keep their cars flowing through a stagnant US market.

With its biggest market in full cardiac arrest, even the omnipresent Toyota has gone begging for yen.

Last week, Toyota finally bowed to the pressure and reportedly applied to the Japan Bank for a 200 billion yen loan (AU$3.167 billion) to keep up its dwindling cash reserves and make sure its global customers can borrow against their vehicles. This is after a massive release of bonds onto the market, which were sacrificed at a reduced rate to get another billion yen in the bank.

Automotive News reported today that Toyota remains the only Japanese manufacturer to actually ask for the money, but Honda is allegedly sniffing around for AU$157 million to use as US customer credit.

Despite of the recent, positive news of plans to increase production due to the high demand of its new Insight Hybrid, Honda will still record the worst profit loss in 15 years this March...

Not wanting to be left out of the handout, Mazda and Nissan confirmed that if some of Japan's cash hoard becomes available through its main bank, they too will put out their hands.