Photo of Stan Blykers and Koji Minami, Toyota Motor Europe and Yuki Ohashi, Citi.
This solution combines a full payments and collections platform for RUB transactions, a fully automated domestic physical pool to consolidate all positions in a single hub, a true end-of-day automated sweep for the excess operational cash and an offshore interest-bearing RUB account to centralise the net position of all daily activity.
Senior Treasury Specialist
Toyota is one of the world’s largest automobile manufacturers and a leading global corporation. Founded in 1937, Toyota now sells vehicles in 170 countries and employs over 300,000 people. Based in Brussels, Belgium and staffed by 2,700 people and more than 60 nationalities, Toyota Motor Europe (TME) handles the wholesale marketing of Toyota and Lexus vehicles, parts and accessories, and manages Toyota’s European R&D, manufacturing and engineering operations.
in partnership with
Liquidity solution to ruble challenge for Toyota in Russia
The major challenge in the region for Toyota Motor Europe (TME) has been the RUB flows and Toyota Motor Russia (TMR) was using several banks in Russia. Due to the peculiarities of the domestic clearing system, the lack of multi-bank solutions in the domestic market and the geographic disposition of the country, expanding in 11 time zones, it has been almost impossible for large overseas treasuries to manage their domestic flows efficiently. Over three billion of operational balances, in local currency, remained fragmented, creating significant cost, working capital and operational inefficiencies. TME acknowledged the problem and despite efforts to reach a solution over the past few years, the cross border flows remained challenging.
They set out the following objectives to:
Extend the transactional window and gain at least one additional day of value on their FX swap transactions.
Reduce the fragmented positions across the different legal entities.
Eliminate idle balances.
Improve the repatriation process to Japan through effective cross-border flow management.
Reduce the cost on the intercompany loans.
Improve the cash flow forecast.
Manage more effectively counterparty and country risk.
TME, TMR and their bank worked to structure a multi-layer solution that enables the clearing of all daily operational transactions in Russia, the funding of the local accounts and the automated integration into a London liquidity overlay account, enabling TME to utilise the funds with good value and eliminate idle cash that was held in fragmented positions across multiple domestic accounts.