Reports from Japanese network NHK said Toyota is seeking a $2-billion loan from state-owned Japan Bank for International Cooperation.
The loan, along with Toyota's sale of roughly $2 billion worth of 10-year bonds at rates much lower than what the carmaker expected, is meant to shore up the company's cash reserves.
It is understood that Toyota will use the bailout to finance loans and stimulate car purchase in the United States.
The US is Toyota's largest and most profitable market. Sales fell 31 percent last quarter and the manufacturer now expects a net loss of as much as $3.5 billion for its fiscal year ending March.
Toyota's bailout request follows that made by other major car manufacturers.
General Motors Corp. and Chrysler LLC have already received $13.4 billion from the US government> They are seeking more funds to keep operations afloat.
Last month, PSA Peugeot-Citroen and Renault SA of France received 6 billion euros worth of aid coming in five-year loans.
Following Toyota's lead and after suffering from a 38 percent plunge in auto sales last month, Honda is also seen to be seeking a $100 million loan from the same state-owned bank in Japan. And just like Toyota, the loan is supposedly to be used to finance loans for new car buyers in the US.
Earlier reports said Mazda Motor Corp. may also be seeking a loan. The car company is partially owned by Ford.
Meanwhile, Mitsubishi has gotten by through subsidies from Japan's Ministry of Health, Labor and Welfare to help pay wages as the car maker cut down domestic production.
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