TOKYO (Kyodo) -- The Japan Automobile Manufacturers Association said Tuesday it has established a scheme to provide one-year loans to auto parts suppliers affected by the new coronavirus pandemic.
Under the first financing program of its kind in the industry, the association deposits funds with Sumitomo Mitsui Banking Corp. which in turn guarantees other banks' loans of up to 100 million yen ($935,000) to each parts supplier for one year.
The program is expected to guarantee up to 2 billion yen of such loans to parts manufacturers which have been hit hard by automakers' production suspension, an association official said.
Akio Toyoda, chairman of the association and president of Toyota Motor Corp., said in April that the industry group would set up a new fund to "mutually help struggling manufacturers." The association later decided to create the credit-guarantee plan instead because it would take less time to prepare than a fresh fund.