Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
If You Don’t Understand Bonds, You Don’t Understand Investing - 25th Aug 19
Gold's Next Move - 25th Aug 19
Fresh Water Crisis Unfolding - 25th Aug 19
Newbie Guide to Currency Pairs in Forex Trading – Review - 25th Aug 19
When A 16-Year-Old Earns $3 Million, You Know It's Not A 'Silly Fad' - 24th Aug 19
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Toyota's Troubles Double as China Threatens Action

Companies / Corporate News Sep 22, 2010 - 11:13 AM GMT

By: Pravda

Companies

Best Financial Markets Analysis ArticleMisfortunes of Japanese automaker Toyota Motor Corp continue. Chinese authorities are threatening to fine the group for bribing dealers. The company, providing cheap loans to three of its dealers, forced them to issue loans to buyers not through the banks of the country, but directly through Toyota. The amount of the fine is 140 thousand Yuan ($20 thousand 650). Damages will amount to 426.3 thousand Yuan ($65 thousand 500).


According to Chinese authorities, a formal decision on penalties will come into force within three working days if Toyota fails to file a request for rehearing on this issue. Meanwhile, the company denies any such allegations and claims that no notification from Beijing on the penalty has been received, The Associated Press reports.

The investigation regarding the financial department of Japanese automotive corporation in China, Toyota Motor Finance (China), was initiated by the Administration for Industry and Commerce of Hangzhou in Zhejiang Province.

According to authorities, in the period from August 2008 to April 2010, the Japanese manufacturer was in collusion with the three dealers who forced customers to take out loans for cars only from the company, not allowing loans from local banks. However, as the Chinese side found out, the annual interest on loans of the Japanese manufacturer is 10-12%, which is significantly higher than those offered by Chinese banks (less than 7%).

As a reward for attracting buyers to the non-advantageous loans, Toyota dealers shared 4.5% of credit earnings with the dealers. In total, Toyota Motor Finance (China) fraudulently earned over 426 thousand Yuan (over $63 thousand).

The agency report stated that the authorities intend to return all illegal income, and fine the company for 140 thousand Yuan ($20.8 thousand). In addition, a similar investigation is conducted in the financial departments of Japanese companies in other cities in China.

This news instantly reflected on the value of Toyota shares. The automaker's shares are currently losing approximately 2.99% in trading in Tokyo.

Toyota's bad luck started last year, when it recalled 3.8 million Lexus cars (model ES 350, IS 250 and IS 350) and Toyota (Camry, Avalon, Prius, Tacoma, Tundra) in the U.S. due to the fact that sliding mat blocked the gas pedal.

In late January, Toyota announced that the gas pedal may stick in 2.3 million cars, and no longer because of the mats. At this time, the cause was a defective accelerator drive, which eventually becomes difficult to push; it rotates slowly to its original position or, at worst, gets stuck in the pushed down position. As a result, the list of recallable models included three models from the last recall (Avalon, Camry and Tundra) and five new models - Toyota RAV4, Corolla, Matrix, Highlander and Sequoia.

Accelerator drive is not the only problem with Toyota. In November, the company recalled 110 thousand Tundra pickups in the United States because of a possible malfunction of spare wheels mounting. In July, the automaker announced the recall of 71 thousand cars because of malfunction in the transmission. In August of this year, Toyota announced a recall of over 95 thousand cars of the three models in the U.S. due to a possible failure of the braking system.

The total number of vehicles recalled by Toyota Motor in the U.S. and European markets due to defects in the gas pedal is nearly 9 million cars. This figure exceeds the annual sales in recent years, which in 2009 totaled 7.81 million, and in 2008 - 8.97 million vehicles.

In this case, the story of the massive recall is ongoing. Recently, Japanese engineers group said they found a fault in the "black boxes" of the cars suspected of spontaneous acceleration.

During the tests of "defective" vehicles Toyota engineers suspected that a device that records the speed of cars was not working properly. For example, the "black box" of one of the crashed pickup Tundra recorded the speed of 274 km / h, which, according to the Japanese, is not physically possible. The observed failure of the program means that not all Toyota cars that have been recalled really spontaneously accelerated.

The latest model recalled by the Japanese company is Pickup Hilux, totaling over 116,000 units. Reason for the recall is towing lugs, which periodically break down, especially on roads with frequent alternates between braking and acceleration.

It is worth noting that the automaker's losses are not limited with repair expenses. In March of 2010, Ministry of Transport of the United States demanded that the leadership of Toyota submits for review all documents relating to the mass recall of cars in the United States to see how quickly the company responded to the identified defects in their vehicles.

As a result, the Ministry of Transport found that Toyota knew about the gas pedal issue no later than September 29, 2009, and alerted the European consumers about the possible problems. However, in the U.S., the company announced the recall of vehicles only in January of 2010. Thus, the company delayed providing this information to the authorities for over four months.

In early April of 2010, the U.S. federal government has imposed penalties in the amount of $16,347,000 on the Japanese automaker Toyota Motor Corp for the fact that it delayed the official announcement of the problems associated with a defect of the accelerator pedal in the US. This is the maximum possible amount of penalty in the U.S. and the highest sanctions ever applied by the Government to automakers.

However, the Japanese automaker does not despair. By the end of 2012, Toyota plans to launch six new hybrid cars and electric cars, which will initially be available only in the North American market.

Earlier, Toyota lagged behind competitors such as Nissan Motor Co and General Motors Co in the number of electric and hybrid models. However, the new plans of the company show that the largest automaker plans to win back the backlog, which was partially caused by the recall of cars due to safety concerns.

Toyota Motor is one of the world's largest automakers. Moscow office of Toyota Motor was established in 1998. Net profit of the group in the first quarter of 2010-2011 fiscal year amounted to 190.47 billion yen (2.21 billion dollars) against losses of 77.82 billion yen a year earlier.

Ekatherina Evstigneeva

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules