Toyota Motor Corp. is considering setting up a securities unit possibly by the end of the year as part of a strategy to strengthen its presence in the financial business, company sources said Wednesday.
The brokerage unit, which will mark the leading automaker's entrance into the securities field, will probably not conduct equity trading initially but will handle settlement tasks for Toyota's proprietary credit card, which is scheduled to be launched by its financial unit, Toyota Finance Corp., in April, 2001, they said.
The brokerage unit will offer comprehensive accounts that have nearly all the features of a typical bank account, allowing customers to arrange for direct deposit of their salaries and settlement of expenditures through credit cards.
In the future, the unit will sell investment trusts, which are financial products similar to mutual funds, the sources said.
They said the move is part of the Toyota group's strategy of strengthening its presence in banking areas, where competition has intensified recently due to the arrival of nonfinancial companies such as Ito-Yokado Co. and Sony Corp.
Instead of banking, where a new participant needs to obtain a license, Toyota is eyeing the brokerage arena, which merely requires registration, according to the sources.
In line with the overall strategy, the group has announced plans to establish a holding company under which nonlife insurance companies as well as domestic and foreign automobile-related financial services firms will offer customers total financial services.
In preparation, Chiyoda Fire & Marine Insurance Co., a member of the Toyota group, has already reached an agreement with Dai-Tokyo Fire & Marine Insurance Co. to merge next year.
Toyota launched a housing loan business this year and is also considering credit card-settlement services on its Internet site, Gazoo.