Tuesday 21 May 2019

Toyota puts it up to rivals as its 'banking arm' to open here

Toyota Auris
Toyota Auris
Eddie Cunningham

Eddie Cunningham

The Toyota brand here is significantly stepping up the drive for buyers with the arrival of the marque's own 'bank'.

The decision means another major player in the automotive market will soon have its own financial service to strategise and fund vehicle purchases.

The establishment here of Toyota Financial Services (TFS), which operates in more than 30 countries, paves the way for the Irish franchise to compete on similar ground with three manufacturer-owned banks already established in the market.

They are Volkswagen, Renault and BMW.

And that trio have financed auto deals worth nearly €3.5bn between them to date.

Volkswagen Bank has loaned €1.8bn to Irish motorists since 2008.

Meantime BMW has facilitated deals here worth more than €1bn (€1,014,575,556) since January 2011.

And the Renault/ Dacia Bank has funded €630m for transactions since its inception in Ireland.

These companies have also helped lead the way in the provision of personal contract plans (PCPs) in particular.

PCPS have, it is generally recognised, helped boost new car registrations for some years.

Now Toyota's financial arm, as revealed in the Irish Independent's Business section on Monday, will enter the fray.

Prior to this, the distributor here used the Bank of Ireland facility.

It is understood the decision was met with disappointment by the bank.

But the company obviously sees benefit in providing car finance directly to customers.

Volkswagen, for example, have their APR rates pitched strongly in favour of top-spec Highline spec/trim levels.

It means they can sell more expensive cars but with lower interest rates the overall cost only adds hundreds to the deposit while maintaining monthly repayments at the same levels as lower-spec models. Result? They are selling lots more Highline models.

Now Toyota's decision will add further edge to the increasingly competitive finance market. And, as you'd expect, it has already sparked speculation within some sections of the industry on what the next move will be.

Indo Motoring

Also in Life