Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

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