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Automobiles

Toyota fined $12m in China for telling Lexus dealers not to discount

Luxury brand has fueled carmaker's growth in slumping market

A Lexus display in Guangzhou: Toyota is accused of putting undue pricing pressure on dealerships for its luxury brand. (Photo by Takashi Kawakami)

GUANGZHOU -- Toyota Motor was slapped with a fine of 87.61 million yuan ($12.5 million) for pressuring dealerships to curb discounts on its Lexus luxury car brand, Chinese authorities said Friday.

The Japanese automaker's Chinese arm received the penalty for violating antitrust law between 2015 and 2018, according to the State Administration for Market Regulation.

The fine totals 2% of Toyota's fiscal 2016 sales in Jiangsu Province, where the violations took place, the regulator said.

Lexus has been a driver of Toyota's growth in China. Even as the Chinese market shrank overall, the automaker's sales rose 7.6% on the year to 1.46 million vehicles for the January-November period. Toyota expects to reach a full-year record in 2019.

Toyota sales managers told dealerships in Jiangsu, near Shanghai, not to cut prices on some Lexus models more than 6% below the automaker's suggested price, the regulator alleged. Dealerships also were told not to discount models sold online.

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