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S&P Rates Toyota Finance NZ NZ$200 Million MTN Program 'AAA'

17 May 1999

S&P Rates Toyota Finance NZ NZ$200 Million MTN Program 'AAA'

    TOKYO, May 17 --Standard & Poor's today assigned its 'AAA'
rating to the NZ$200 million medium-term note program of Toyota Finance New
Zealand Ltd., which is guaranteed by Toyota Motor Finance (Netherlands) B.V.
The rating is based on the consolidated strength of the Toyota group of
companies. The outlook on the rating is negative.
    The ratings of Toyota Motor Corp. reflect the company's proven ability to
maintain an exceptionally strong financial profile amid difficulties in its
operating environment.  Japan's largest automaker and a global leader in its
field, Toyota has improved its financial performance in the face of weakness
in the Japanese market and lackluster demand in other Asian markets.  This is
the result of both rigorous cost-cutting measures and the company's
competitive position in other markets overseas, particularly in North America.
Despite continued weakness in Japan and less favorable foreign exchange rates
anticipated over the next several years, the company is expected to achieve
stronger profit and cash flow levels than during the period from fiscal 1993
to 1995, albeit below the 1997 peak--backed by its efforts to streamline
manufacturing processes, heighten the flexibility of its cost base, and
increase its geographic diversity.
    The ratings also incorporate expectations that the near-term threat from
accelerating consolidation in the global auto industry will be limited.
Toyota maintains a strong domestic market position, with superior production
efficiency, highly competitive engineering capabilities, and exceptional
financial strength, which enable the company to sustain high levels of R&D
investment.  Indeed, given its vast financial resources, the company is
well-positioned to benefit from the relative business and financial weakness
of some of its domestic peers.
    Toyota has an exceptionally strong balance sheet, with a net cash
position, after adjusting for debt held by captive finance companies, of over
Y500 billion.  It has outstanding financial flexibility, supported by more
than Y2.2 trillion (about US$18 billion) in cash and short-term marketable
securities as of September 1998.  The current rating assumes that Toyota will
remain cautious towards extending financial support to financially troubled
group members or other affiliated companies.

    Outlook: Negative
    Weak economic conditions in Japan will continue to constrain auto demand
and pressure Toyota's earnings.  Concerns also remain that other corporate and
financial institutions may turn to Toyota for financial support.  The ratings
could be lowered if the domestic economy deteriorates further than expected
and the company's business and financial performance is materially impacted,
Standard & Poor's said. --CreditWire