Toyota to recall 1,380 defective cars in China

Japanese automaker Toyota will start recalling 1,380 vehicles on Jan. 10, 2020 from the Chinese market, according to China's market regulator.

Filed by Toyota Motor (China) Investment Co. Ltd., the recall involves 723 imported Alphard Hybrid models manufactured between Aug. 19, 2019 and Sept. 10, 2019, as well as 657 imported Vellfire Hybrid produced between Aug. 19, 2019 and Sept. 6, 2019, the State Administration of Market Regulation said in a statement.

Due to defective emergency locking retractor, the safety belts may fail to take effect when vehicles are involved in collisions, said the statement. The automaker promised to replace defective parts free of charge to eliminate safety risks, according to the statement.

Earlier, China's market regulator on Friday has fined Japanese carmaker Toyota Motor 87.6 million yuan ($12.5 million) for price-fixing on its premium Lexus cars in eastern Jiangsu province, according to a document on its website. The decision comes as China steps up regulation over auto sales in the world's biggest vehicle market, where more than 28 million cars were sold last year.

The anti-monopoly bureau of State Administration for Market Regulation said that between 2015 and 2018, the Japanese carmaker set a minimum sales and resale price for its cars in coastal Jiangsu province, which deprived dealers of pricing autonomy and harmed customers' rights.

Lexus also fixed sales strategies in the region over the period, including offering customers discounts while asking them to purchase accessories at fixed prices, a sales tactic usual among individual auto dealers in China but frowned upon for carmakers.

A spokesman at Toyota, Lexus' parent firm, told Reuters the firm acknowledged the penalty and respects the decision. He did not comment further. China's auto sales are declining, but Lexus' sales keep growing. It sold 180,200 vehicles in the first 11 months this year, a 21% jump from a year earlier. In June, China's market regulator imposed an 162.8 million yuan fine on Ford Motor Co's joint venture with Changan Automobile Group for violating anti-monopoly law.

Meanwhile, a union at Toyota Motor Corp. is planning to propose that a larger emphasis be put on performance when determining workers' pay increases, rather than continuing the current system in which seniority is the main criteria, a source close to the matter said Thursday.

The policy set out by the Toyota Motor Workers' Union is widely used as a standardsetter for annual shunt? wage negotiations across Japan each spring. The proposed system, which also reflects management's wishes, would increase the possibility that larger wage gaps could form between union members at Toyota.

The policy change comes as Japan's largest automaker faces a difficult market environment, with the industry rapidly shifting to electrified and autonomous vehicles, leaving the company looking to improve its competitiveness. Some union members have called for the introduction of a system in which wages are decided on the basis of performance, the source said.