Toyota Motor Corporation
) is reducing the price of the spare parts for its Lexus vehicles
in China from Sep 1, 2014. The company will lower the price of
almost 15,000 parts, which includes a cut of 35% in radiator parts
prices and 30% in engine and transmission prices. On an average,
the prices of the spare parts will be reduced by 26%.
The cutback was announced in response to the National and
Development Reform Commission's (NDRC) antitrust probe in the auto
industry. Notably, the body is concerned about the pricing
practices prevalent in the industry. It reported that 12 Japanese
auto parts manufacturers indulged in price fixing and has
therefore, imposed fines of 1.24 billion yuan ($200 million) on
Apart from Toyota, Audi, BMW, Daimler AG's (
) Mercedes-Benz, Jaguar Land Rover, Chrysler and Honda Motor Co. (
) have also lowered the price of their vehicles or spare parts
recently. The NDRC had recently contacted General Motors Co.'s (
) Chinese joint venture (JV) as part of the investigation.
The JV between General Motors and the state-owned Shanghai
Automotive Industries Corp. - the Shanghai General Motors - sells
vehicles under Buick, Cadillac and Chevrolet brands. Shanghai
General Motors focuses on supplying high-quality products and
services which conform to national regulations and policies. The
automaker stated that the prices of vehicles and components in
China are on par with that in the U.S. or Europe. All the
components required for a car, if purchased separately in China,
would cost about 265% to 330% of the price of a whole vehicle.
Meanwhile, the same would cost 300% of the vehicle price in the
American and European markets.
Toyota currently carries a Zacks Rank #2 (Buy).
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