Toyota, Daimler and FCA borrowing billions to face Coronavirus Crisis

By Jared Solomon | on March 28, 2020

The Coronavirus pandemic has caused the entire world to go under lockdown. The world economy is sure to take a big hit from this, as industries have almost shut down completely. To combat the crisis, carmakers such as Daimler, Toyota, and FCA are looking to borrow a whole lot of money. 

Nobody in the world could have foreseen the devastation that the Coronavirus would bring to the world. Human life is at great risk, and there have been more than 21,000 deaths to this day. To make sure that everybody is safe and we come out of this mess, the entire world's economy has been sacrificed, and rightly so!

But, what will happen once normalcy returns to the world? It seems likely that the auto industry will be one of the biggest casualties. So, in order to make sure that it doesn't become, say the biggest casualty of this growing pandemic, companies such as Toyota, Daimler and FCA are already looking for money lenders. 

It has been reported that once production resumes, carmakers will need a lot of cash flow to get things going again. Auto companies have been exploring every possible option to make sure they have working capital on hand, and it seems that borrowing money seems to be a good way to go about doing this. Toyota, which has stopped production at most all of its factories around the world, including India, is looking to borrow as much as $9 billion (Rs 64,000 crores). Toyota has announced that it will begin production in some of its facilities from April 20th. 

Daimler is also in a similar situation, and it looks like it is looking to borrow almost $11 billion (Rs 77,000 crores) to get things going again and continue operating in a healthy state. Another big car maker is FCA, which is looking at securing additional lines of credit and might borrow as much as $4 billion from two different banks. The credit facility will be used for general corporate purposes and capital requirements. 

As time goes on, and as the entire world continues to be on a lockdown, there is much uncertainty on how industries will regain lost ground. Ford has also announced that it is looking for additional credit to battle the crisis. While we wait out the storm and hope that everything becomes normal again, one thing is for certain – if a big industry is looking to borrow this much money, it means that a huge economic crisis is on its way. And we, common folks, need to be prepared for it.

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Tags: Mercedes Daimler Toyota FCA Fiat Chrysler Coronavirus

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