Toyota will slash Lexus spare parts prices in China post antitrust probe


Toyota noted that the price cut will cover around 15,000 Lexus parts at an average of 26 percent. The announcement was posted on the official Toyota Lexus China site. Some parts will have higher cut rates such as the radiator parts (35 percent) and engines and transmissions (30 percent).

So far, Lexus is the latest car brand that has joined the spare parts price cut bandwagon. Other cars that have lowered their prices include Audi, Mercedes-Benz, and BMW. Foreign carmakers in China have been lowering their prices in the height of China's anti-trust investigation which had been extended to the auto industry. Based on the record, the root cause of it all is when the National and Development Reform Commission discovered that 12 Japanese parts manufacturers are guilty of price-fixing. The commission had charged them with a fine of 1.24 billion yuan which is equivalent to $200 million.

However, there were two among the ten companies that avoided paying fines. These companies supported their claim by offering important evidence.

"The cuts were made in response to the NDRC's concerns over pricing practices in the industry," said Naoki Sumino, Toyota spokesman. "As a company that is rooted in China, Lexus will strictly comply with China's laws and regulations, and continually improve its business practices."

Prior to the imposed fine on the 12 Japanese companies, foreign luxury car makers such as Daimler AG, BMW AG, Audi AG, and Jaguar Land Rover Automotive PLC have already lowered the prices on either their cars' spare parts or their car models. All companies have cited that the move was in response to China's anti-trust campaign.

The six-year-old antimonopoly law enables China to gain authority in regulating the prices of industries which are otherwise dominated by foreign names or brands. It encompasses a number of foreign companies which would range from pharmaceuticals to baby-formula milk makers. Some of these companies have already been charged to pay fines.

China used to be the haven of foreign luxury car makers who believed that the country has a lucrative market. Their fate was changed when China's state media began to throw them with some accusations. These would include the accusations of dominating the market which enabled them to earn exorbitant revenues, manipulating the sale of auto parts, and overcharging consumers.

Companies such as Mercedes-Benz, Audi, Volkswagen, and BMW have already announced that they are cutting the prices of their auto spare parts after the Chinese regulators have accused some auto manufacturers with anti-competitive practices.

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