Toyota Motor Vehicles First Penalty in China for Commercial Bribery

Xinhua.net, Hangzhou, September 20 (Reporter Zhang Yi and Qu Lingyan) monopolize 4S shop auto consumer loan business, collect high interest and pay rebates to 4S shop - Toyota Motor Finance (China) Co., Ltd. received the commercial bribe on the 20th Notice of Administrative Punishment Hearing of Jianggan Branch of Hangzhou Administration for Industry and Commerce.

It is understood that this is Toyota Motor is Toyota's first commercial bribery punishment in China. This company, which is engaged in personal loan business for auto consumption, is a wholly-owned subsidiary of Toyota Motor Corporation of Japan. The company was also investigated in Ningbo and other places for suspected commercial bribery of a number of auto 4S stores.

According to a survey conducted by the industry and commerce department, starting from August 2008, Toyota Jinfeng Toyota Auto Sales Service Co., Ltd., Zhejiang Guangfeng Tongtian Automobile Co., Ltd. and Hangzhou Dongchang Automobile Sales Service Co. Priority is given to Toyota Finance in recommending auto loan business, while Toyota Finance provides the consumer loan business with the above-mentioned three distributors with payment of “procurement fee” or “service fee”.

It is understood that Toyota Motor's auto consumption one-year loan interest rate as high as 10-13%, while the four major state-owned bank interest on similar loans less than 7%. According to a car with a mid-range car price of 150,000 yuan, a down payment of 50,000 yuan and a one-year loan of 100,000 yuan, consumers will only need to pay 7,000 yuan for loans to the four state-owned banks, and 10,000 yuan for loans from Toyota Finance. Yuan to 13,000 yuan interest, and 4.5% interest, Toyota Finance is returned as a premium to the 4S shop.

According to the notice of hearing issued by the Jianggan District Administration of Industry and Commerce in Hangzhou, from August 2008 to April 2010, Toyota Finance paid a total of 7,0640.99 yuan to the 3 car 4S shops for "consumer fees" or "service fees", which was a total of consumer realities. Repayment interest is 757,609.23 yuan. To remove the business tax payable, Toyota Finance made a total profit of 426,352.33 yuan.

The investigation indicated that these illegal incomes of Toyota Finance come from the car loan interest of 49 Toyota Motor consumers.

The law enforcement agencies believe that according to the "Law of the People's Republic of China Against Unfair Competition Law" and other related laws and regulations, the behavior of Toyota Finance is a commercial bribery and it is intended to make an administrative penalty decision of confiscation of more than 420,000 yuan of illegal income and a fine of 140,000 yuan.

The reporter learned that, as of now, in addition to the Hangzhou Administration of Industry and Commerce, the industrial and commercial departments in Ningbo and other places have also conducted investigations into the financial bribery of Toyota Finance in its jurisdiction.