Annual Report 2009 - Toyota Financial Services

Annual Report 2009depreciation periods to 1 and 2 years respectively, as a direct response to the increasing financial crisis. In such a situation, theinterest of business entities in new investment, and thus also in the financing of cars, significantly decreased in anticipation ofthe approval of this amendment at the beginning of 2009.❍ The decrease of vehicle-funding potential was also due to the announcement of the ”scrap allowance“ in the neighbouringcountries, which resulted in the fact that all automobile producers, including Toyota, gradually directed their sales to thesecountries to meet the growing demand. However, these customers are not available to a company providing financial serviceson the territory of the Czech Republic. The so-called re-export sales are included in the official statistics and they distort theoverall view of the passenger car sales especially in the Czech Republic. According to unofficial estimates, these involved asmuch as 30% of the total sales of passenger cars in the Czech Republic in the first quarter of 2009.❍ Despite the negative developments in financial services, Toyota Financial Services focused on complementary productsdesigned to cash-paying customers (see Toyota Pojištění section) in order to compensate for the existing status and createa large potential for the future.❍ Despite the negative developments in the recent months, we assume that this is a temporary phenomenon that will soon beovercome.Table 2 offers an insight into the overall market share of Toyota and Lexus in sales of new vehicles in the Czech Republic togetherwith the share of financing provided by our company.Looking at the realized outcome (besides the facts mentioned in the previous paragraph), it is necessary to realize that theresulting 17.84% penetration was achieved due to the pro-active business activities of our company, without the support of a jointcampaign with subsidies by the importer which was implemented in the previous years. It is therefore not necessary to see theresult as a strictly negative one, since even in the absence of joint programs with the distributor and given the objective marketfactors, we were able to increase market penetration to the level of almost 60% of the market share of funding (50% market shareis perceived as a half of the funding achievable. If we know that 31% of out of 100% cars sold are funded in some way, thenachieving a 17.84% penetration means that more than a half of the business opportunities to finance the acquisition of the car wereimplemented). Yet there is still some room for expansion and for the resources which were not spent.Table 2 – Market share of new cars sold on the market by Toyota and Lexus (passenger and light commercial vehicles)Parameter / fiscal year 2004 20052006 20072008 2009Car sales in the Czech Republic (units) 171,116 158,308166,278 178,394199,885 195,694Sales of Toyota and Lexus makes (units) 4,418 4,7494,717 5,7266,041 6,402Toyota’s share on the Czech market 2.58% 3.00%2.84% 3.21%3.02% 3.27%Number of vehicles financed by the TFSCZ (units) 1,455 1,3361,571 1,676 1,644 1,142Penetration reached by the TFSCZ 32.93% 28.13%33.31% 29.27%27.21% 17.84%Figure 3 – Development of number of vehicles funded (newly contracted business cases) and of the penetration achieved1,800 32.93%1,6001,4551,4001,20028.13%1,33633.31%1,5711,67629.27%27.21%1,6441,14235.00%30.00%25.00%1,0008006004002000Units17.84%2004 2005 2006 2007 2008 200920.00%15.00%10.00%5.00%0.00%PenetrationAchieved TFSCZ penetrationNumber of vehicles financed by TFSCZ (units)17