According to two executives based in Beijing, the National Development and Reform Commission (NDRC) is undergoing initial probe on the Lexus through the China Automobile Dealers Association (CADA).
The Toyota company is "cooperating fully with the queries from the authorities on Lexus," said Naoki Sumino, spokesman of Toyota in Tokyo. No further details were given by Sumino.
Most of the questioning focused on Lexus' spare parts policies which included replacement and pricing. One of the company executives said that people from CADA wanted the auto making companies to take their survey seriously as the regulators mean business time.
China's anti-monopoly law, which was enacted in 2008, had targeted foreign industries and sought for their strict compliance. Industries are varied and can range from those making milk powder to those which have ventured into the jewelry business. Recently, Chinese regulators expanded the coverage of their probe and included other sectors such as autos, electronics, and pharmaceuticals.
The series of investigations have caused foreign companies to feel uneasy. They believe that the regulatory measures hamper their business and promote potential Chinese competitors thereby violating its free-trade commitments.
Moreover, the 2008 law was seen by foreign companies as an initial step that would clarify any operating queries in China. In time, they slowly realize that the Chinese government enforces the law more actively against foreign companies as compared to enforcing it on their Chinese rivals.
Last year, the regulators have fined five foreign dairy companies and one company from Hong Kong for establishing the minimum prices that distributors should charge the consumers. The practice is quite common in some countries. However, the regulators described the system as interfering with market forces, adding that consumers are forced to pay higher prices.
Other companies that are being investigated by the Chinese regulators include InterDigital Inc., Qualcomm Inc., and Microsoft Corp.
Earlier in the week, Chinese regulators have decided to impose punishment on Fiat SpA's Chrysler and AG's Audi brand because of monopoly practices. They said that the automakers could be fined of up to 10 percent of their local annual earnings.
Toyota's legal department has responded to the survey through printed "binder-thick" answers and evidence. The survey was capped last month by a visit from an official of CADA.
"In our case, the inquiry focused on spare parts. They asked about our spare parts prices, whether or not dealers are able to procure spare parts from any supplier, among other things," said one executive from Toyota.
