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S. Africa penalizes Toyota Motor for keeping car prices high.


A South African government agency said Thursday it has imposed a 12 million rand penalty on a Toyota Motor Corp. subsidiary for forcing dealers in the country to maintain minimum retail prices.

The Competition Commission said it has ordered Toyota South Africa Motors (Pty) Ltd. to pay the penalty -- equivalent to some 200 million yen or $1.75 million. The Toyota arm manufactures and sells a range of Toyota vehicles, including the Corolla passenger car.

With the minimum retail price maintenance regime, Toyota limited or eradicated dealers' ability to offer discounts, the commission said.

Toyota South Africa Motors said the same day the company had violated the nation's laws against anticompetitive practices during a certain period in 2002, so it is obliged to pay the punitive charge.

The commission said Toyota's business practices have undermined the interests of consumers, noting that the appreciation of the rand should have brought about cuts in the prices of new vehicles.

In addition, the commission said it has begun an investigation into the business practices of other automakers.

''We are of the view that the penalty against Toyota sends a loud and clear message that the Commission is determined to aggressively pursue violations of this nature,'' the commission said in a statement.

Toyota South Africa Motors officials said the subsidiary was set up after purchasing a stake in a local company.

When Toyota acquired control over the management of the local company in late 2002, it found the firm's former management had engaged in the anti-competitive practice of maintaining minimum retail prices, they said.

Toyota immediately had the company discontinue that anti-competitive practice, they said.
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Publication:Japan Transportation Scan
Geographic Code:9JAPA
Date:May 10, 2004
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