Toyota Deciding: Continue 0% Financing In The U.S.?

TOKYO, Nov 16 Reuters reported: Toyota Motor Corp , Japan's top automaker, said on Friday it was considering whether to continue its zero-interest financing on purchases of three car models in the United States after the end of November.

Zero-percent and low interest loans are at the heart of an industry price war as automakers scramble to win back U.S. consumer confidence in the wake of the September 11 attacks.

Toyota President Fujio Cho made the announcement at a news conference when asked how the company would respond to decisions by General Motors Corp and Ford Motor Co to extend their zero-rate deals to January.

``As to whether we should continue it a bit more, we haven't come to any final decision,'' Cho said. ``We are still in the middle of considering whether to do it.''

Toyota said earlier this month it intended to end zero-interest financing on three older vehicles -- its Tundra pick-up truck, Corolla sedan and the Forerunner sports utility vehicle -- at the end of November.

The ultra-cheap financing deals have done wonders for U.S. auto sales, with October industry-wide sales hitting record numbers.

The deals have also been offered by other automakers such as the Chrysler side of DaimlerChrysler AG and Mitsubishi Motors Corp .

But analysts and auto industry executives have warned that the zero-percent loans, which are extremely expensive for the automakers, are eroding profitability and eating into next year's sales.

Toyota's U.S. sales rose 28 percent year-on-year in October, better than a 24 percent industry-wide rise, and the company has expressed confidence about its prospects in the U.S. market in the second half of 2001/02.

The world's third-largest automaker posted record sales and profits in the half year that ended in September, and many analysts are predicting record profits for the full year to next March.

Toyota unveiled on Friday its two newest entries into the minivan market, ``tall'' minivans known as the ``Voxy'' and ``Noah''.

For the time being, the company only plans to release the models in Japan, with the Voxy priced between 1.89 million yen ($15,440) and 2.59 million yen, and the Noah between 1.89 million yen and 2.54 million yen.

President Cho said Toyota was aiming for monthly sales of 4,500 units of the Voxy and 5,500 of the Noah.

The vehicles will face stiff competition in Japan's crowded minivan market from rival vehicles such as the popular Stepwagon by Honda Motor Co Ltd .

Shares in Toyota ended up 0.67 percent at 3,020 yen, underperforming a 1.52 percent rise in the benchmark Nikkei average .

($1 equals 122.37 Yen)