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In the face of the impact of the current COVID-19 epidemic on the global economic market, it seems that even Toyota, one of the most profitable car companies in the world, has not been able to cope with the huge impact of the epidemic. According to foreign media reports, Toyota has sought credit lines totaling 1 trillion yen (about 65.8 billion people) from Sumitomo Mitsui Bank and Mitsubishi UFJ Bank.

Toyota declined to comment on the report in an email, saying: "We have been assessing our financing needs, but we currently have no information to announce about the media coverage." In addition, Sumitomo Mitsui and Mitsubishi UFJ also said they would not comment on individual companies.

According to foreign media reports, Toyota is seeking a credit line of 1 trillion yen mainly because the cost of raising funds from the financial market is increasing due to the expansion of the COVID-19 epidemic.

Although Toyota is still on a solid financial footing, no one can predict the impact of the unpredictable epidemic and how long it will last. Therefore, the industry believes that Toyota's action is more to guard against the impact of novel coronavirus's epidemic on sales and performance, and hopes to maintain more adequate funds to deal with the impact in the future.

With the continuous spread of the novel coronavirus epidemic in the past two months, Toyota has shut down most of its factories in Europe and the United States. Among them, 13 North American vehicle and parts factories, including the United States, Canada and Mexico, have stopped production, and the resumption date has been postponed to April 6; and seven production lines in five factories in Japan's local market have also announced that they will stop production for a period of time from April 3. In addition, Toyota's plant in the Philippines has stopped production until mid-April, while its plant in Malaysia will be closed from next Monday to the end of March. Toyota's plants in South Africa and India have also been closed, and only China can maintain normal operations.

Obviously, affected by the epidemic, most of Toyota's factories around the world have been shut down, and operating costs have increased rapidly. To this end, it is inevitable to seek more funds to achieve stable cash flow.

According to Toyota's latest third-quarter report, Toyota's net income was 7.55 trillion yen, down 3.3% from 7.8 trillion yen last year, with cash deposits of about 5.2 trillion yen. However, Moody's, the international rating agency, has downgraded Toyota's credit rating to A1 from the previous Aa3.

This also shows that Toyota is in a difficult state. Toyota spokesman Kensuke Ko also said a few days ago that Toyota will continue to evaluate its funding needs in order to seek large credit and credit rating downgrades. However, the report of seeking 1 trillion yen in large credit has not yet been officially confirmed.

Of course, Toyota is not the only car company affected by novel coronavirus. German carmaker Daimler has also been revealed that it is in talks with banks to obtain a credit line of 10 billion euros ($11 billion) to 15 billion euros ($16.6 billion). The final results will be announced next week. In addition, Fiat Chrysler also signed a large loan of $3.8 billion (27 billion yuan) with relevant banking institutions a few days ago.

Obviously, the current situation that many overseas car companies have stopped production as a result of the COVID-19 epidemic is still very grim. In order to deal with the longer-lasting impact of the epidemic, major automakers will have to need a series of measures to further ensure the stability of their cash flow.

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