Annual Report 2009 - Toyota Financial Services

Toyota Financial Services Czech s.r.o.Due to its long-term strategy, the company Toyota Industrial Equipment Europe terminated an exclusive representation contractwith a private distributor for the importation of Toyota forklift trucks, and handed this activity fully over to the company BT Českárepublika s.r.o. There are initialization procedures still underway with the newly created entity, Toyota Material Handling CZ s.r.o.aimed at developing a new business strategy for the Czech Republic, but the situation is rather complicated due to the overallFigure 1Share of products undernew contracts accordingto the number ofcontractsToyota Vario0.7%Toyota Forklift Leasing/Kredit0.2%Toyota Equipment0.0%Toyota Rent/Rent Plus7.1%Toyota Leasing16.4%Toyota Genio18.8%Toyota Kredit56.7%Figure 2Share of products undernew contracts accordingto the value financedToyota Vario0.8%Toyota Forklift Leasing/Kredit0.3%Toyota Equipment0.0%Toyota Rent/Rent Plus12.7%Toyota Leasing14.9%Toyota Genio15.9%Toyota Kredit55.4%situation in the specific business activities of Toyota Motor Corporation, where the vehicles and handling equipment businesses arestrictly separated in both financial and commercial terms. We therefore, expect the decline of funding in this area in the future.Overall, we experienced an year-on-year decline in trade; in terms of the value financed, by CZK 283 million (less than 40%) interms of contracts, by 622 (33%), and in terms of cost excluding VAT, the turnover decreased by CZK 339 million (less than 36%).The reasons for the decline in total transactions implemented were the following :❍ The impact of the amendment of the Income Tax Act and of the end of 2007, which negatively affected the overall approach tofunding, namely that of business entities. The amendment limited the tax relief related to the financial lease, established limitson the deduction of interest on loans, and also represented a low-capitalization test for companies.❍ In the second half of 2008, not only companies but also individual entrepreneurs and citizens were strongly influenced by theinformation on the global economic crisis. This resulted in a shift, or rather by a certain reluctance of some entities as to financeand investment in general.❍ At the end of 2008, there was also the „unfortunate leak“ of information from a government meeting on the upcomingamendment of the Income Taxes Act (this was another measure in a short period of time which directly affected purchasingand financing of vehicles) of the Value Added Tax Act. The leaked information related to upcoming amendments of legislationallowing deduction of VAT to taxpayers with newly purchased business vehicles, and also on the reduction of 1 and 216