Toyota plans a finance arm in Korea to spur auto sales

Toyota Motor Korea will set up an automobile finance company here to be called Toyota Financial Service Korea. Ichiro Ogiso, president and chief executive of Toyota Motor Korea, told a press conference yesterday that the finance arm will be established in the first half of the year. Toyota Motor Korea will also establish a training center here, Mr. Ogiso said. “Toyota Financial Service Korea will be founded in May and will start service in December,” said Mr. Ogiso. “The company will offer loans or leasing services at the interest rates that are lower than the market rate.” Toyota Financial Service Korea, with initial capital of about 20 billion won ($17 million), will be among the first foreign-owned consumer finance firms to do business here; GMAC, the retail automobile finance arm of GM, GE Capital and RCI, a subsidiary of Renault Group, are also preparing to open their doors here. The Toyota Training Center would be set up, Mr. Ogiso said, to help Toyota Korea establish a sales and service network in the country. The center will train workers in general auto maintenance techniques and body repair. “Within this year, we will also set up three or four frame and auto body painting shops and will add dealerships in Bundang and Incheon in June, and in Daegu and Daejeon early next year,” Mr. Ogiso said. Toyota also introduced its RX400H, a hybrid sport utility vehicle that runs both on electricity and gasoline. “The first hybrid version of Lexus, RX400H, will hit the U.S. market around the end of the year,” Mr. Ogiso said. “We set a target to introduce the model in Korea next year.” Hybrid cars have 15 to 20 percent better fuel efficiency than ordinary vehicles, emit less pollutants and do not need separate battery recharging facilities. The battery is charged by a generator connected to the engine when the vehicle is running on gasoline. Although Hyundai Motor also plans to roll out a hybrid version of its subcompact model Click for commercial use next year, the hybrid vehicle field is mostly an uncharted area for the Korean motor companies. Toyota Motor Korea led the market in sales of imported cars from October through December, outstripping the long-time market leader BMW. But it fell to third place after BMW and Mercedes Benz in January. “What we think is more important is customer satisfaction, not the number of sales,” Mr. Ogiso said. by Lee Won-ho