Comesa watchdog probes Toyota over trade practices

A Toyota logo is seen in a showroom at a Toyota dealership in Warsaw on April 11, 2014. [Reuters]

A regional competition watchdog has opened investigations on the dealings that Toyota Tsusho has with its distributors across different countries within the Comesa bloc.

The Comesa Competition Commission  (CCC) said it had commenced a probe on the company for the possible violation of regulations that prohibit certain trade practices that could be preventing, restricting or distorting competition within the Common Market for Eastern and Southern Africa.

In a June 16 notice, the commission said the agreements between Toyota and its agents in different Comesa markets for the sale of new vehicles and spare parts tie down the agents to selling products in specific countries, which has partly ensured higher cost of vehicles and spare parts.

“The commission has reasonable cause to suspect, and does suspect, that the distribution pacts do not allow authorised distributors to sell Toyota products outside their respective territories, or sell Toyota products to any third party who they believe sell, export or transfer directly or indirectly to any place or country outside their territory.”

CCC noted that the firm played a role in influencing prices of the products that its agents sold in the market, rather than allow competition and other market forces determines certain aspects of pricing.

“The commission has reasonable cause to suspect that Toyota has provided price guidelines to its authorised distributors for the pricing of Toyota products sold to consumers in the common market, which may contravene the provisions of the regulations pertaining to resale price maintenance.”

It has invited stakeholders from Comesa markets where the firm has operations to give their views on the matter by July 30.

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