Price fixing in the auto industry has been a recurring problem in China as enforcement of the anti-monopoly law has been selective and the penalties are relatively low. Credit: Lexus.

Toyota Motor Corp.’s China unit was fined 87.6 million yuan (US$12.5 million) for price fixing in eastern Jiangsu province, China’s market regulator said Friday.

The Jiangsu Administration Bureau for Market Regulation found that between 2015 and 2018 Toyota set a minimum sale price for its premium Lexus cars in several cities in Jiangsu province, depriving dealers of pricing autonomy and harming competition, Caixin reported.

The leading Japanese automaker’s local unit also took a number of measures to impose price controls, such as cutting supplies to dealers selling at lower prices for certain models, the regulator said.

Toyota said the company respects the regulator’s decision.

Toyota is the seventh automaker fined for price fixing since China’s anti-monopoly law came into effect in 2008. In June, China’s market regulator imposed a 162.8 million yuan fine on Ford Motor’s joint venture with Changan Automobile Group for violating law.

Price fixing in the auto industry has been a recurring problem in China as enforcement of the anti-monopoly law has been selective and the penalties are relatively low, said Liu Xu, a researcher at Tongji University’s Research Center of Intellectual Property and Competition Law.

Unlike the European Union, where violating automakers are fined based on the parent companies’ global sales in the previous year, China calculates fines based only on sales in the region where the violations took place.

In Toyota’s case, the fine was based on 2% of Toyota’s China unit’s sales in 2016.

Meanwhile, Technode reports that Toyota has started operating a mobility company for car rental and ride services in the southern island province of Hainan in order to capture a piece of the massive Chinese ride-sharing market.

Toyota said it will first offer a range of mobility services including car leasing and higher-end ride-hailing services on the island along with two of its local dealers, Zhongsheng Group and Hainan Jiahua Group, according to an announcement.

A fleet of new Camry, Avalon, and Highlander models will be available for short-term car rental, while Alphard and Lexus cars will be used for high-end ride services.

Toyota’s local dealership will provide full-service staff including drivers as well as regular maintenance services. Tourists can rent cars using the company’s WeChat account, online travel platforms, or partner hotels, according to the statement.

Toyota is shifting into mobility services to meet growing demand from Chinese mid- and higher-end users, the company added.

According to Automotive News, Lexus is being propelled by crossovers and hybrids in China, outpacing the broader new-vehicle market with sales surging 31% to 109,933 in the first seven months.

In addition to a broad hybrid lineup, the gains have been driven by the ES sedan and the NX and RX crossovers, Lexus’ China office said, without revealing sales by model for the period.

Demand for Lexus hybrids totaled 37,518 through July, a rise of 43% from a year earlier.

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