JAMA to Support Auto Parts Makers' Financing

Economy

Tokyo, June 23 (Jiji Press)--The Japan Automobile Manufacturers Association established Tuesday a framework to support financing of auto parts makers with faltering earnings due to the fallout from the novel coronavirus outbreak.

Each struggling auto parts maker will be given 100 million yen in loan guarantee in principle, with the total amount of loan guarantee seen reaching 2 billion yen, according to the association.

JAMA hopes to help sophisticated automotive technologies and personnel be maintained by supporting small firms and microenterprises at a time when automobile demand is falling globally because of the pandemic.

According to Teikoku Databank Ltd., three auto parts makers in Japan went bankrupt in or after April due to the epidemic. More companies are expected to collapse amid the virus crisis, an official of the credit research firm said.

Under the program, JAMA will put some of its deposits in Sumitomo Mitsui Banking Corp. as collateral. The bank will serve as a loan guarantor to make it easier for troubled auto parts makers to secure lending from their main banks at an early date.

[Copyright The Jiji Press, Ltd.]

Jiji Press