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Lexus, which was fined for price fixing a few days ago, today released sales figures in China in 2019, becoming the fifth luxury brand to sell more than 200000 vehicles. Officials say Lexus sold 200521 vehicles in China in 2019 and 160468 in 2018, up 25 per cent from a year earlier.

According to sales figures, Lexus does not overtake Cadillac, so it still ranks second in second-tier luxury, but Lexus's 25 per cent growth in 2019 will be the fastest-growing luxury brand.

So far, Lexus has launched 11 series and 18 models in China, mainly the sales of ES, RX and NX models. The compact SUV UX, which went on sale in early 2019, further enriched the product lineup and lowered the price threshold to become an entry-level SUV for Lexus. Lexus officials also announced that the luxury MPV LM will officially announce the suggested retail price and launch on February 24, 2020. the car will become the most expensive model sold by Lexus in China, after parallel imported models have raised the price to 20-3 million yuan.

Two major events happened to Lexus in China in 2019, both related to price.

I.

In September, Lexus abruptly raised the official guided prices of ES, NX, UX and LS models by between 6000 and 15000 yuan, causing consumers who had already signed contracts to raise prices again, angering consumers. The public opinion storm also led to the Lexus official blog comment area is very lively, netizens collectively scolded Lexus's sudden price increase.

Some consumers said that the original purchase of the minimum ES 200guidance price of 279000 yuan, after the price increase and dealer price increase, landing to 370000 yuan.

The price increase caused a lot of public opinion, and then a letter of apology signed by Dazhuren, deputy general manager of Lexus China (officially transferred on January 1, 2020), circulated online, further aggravating the contradiction. The implication of this letter is that no matter whether consumers accept it or not, the car can be picked up by making up the price difference. However, the letter of apology was not released on the official channel, and the official did not refute the rumor.

As consumers did not buy it, manufacturers ignored it, and finally some dealers volunteered to voice and bear the difference after the price increase. One of the Lexus dealers said that customers can fulfill the contract at the price agreed in the original contract, and the 4S store voluntarily bears the difference after the official price increase, as long as the car purchase contract is signed before the price increase.

II.

On December 27, 2019, the General Administration of Market Supervision issued a penalty decision on Toyota Motor (China) Investment Co., Ltd. in December 2017, the former Jiangsu Provincial Price Bureau filed a case against Toyota Motor (China) Investment Co., Ltd. on suspicion of monopolistic behavior, involving the Lexus brand, the illegal act is true, and imposed a fine of 87.6131 million yuan.

Specifically, Toyota's China regional sales manager requires dealers in Jiangsu Province to quote prices uniformly according to the suggested retail prices of each model when selling Lexus cars on the Internet platform by holding dealer meetings, shop inspections, Wechat notices, and so on. Dealers shall not lower the online quotation without authorization. Through the holding of regional cooperation meetings, Wechat notice and other means to restrict dealers to sell a variety of Lexus models of the minimum resale price, mainly related to Suzhou, Wuxi, Changzhou three regions.

In addition, Toyota China also implements price control through a number of management measures, such as using unified network quotation as an assessment indicator for regional managers and for dealers who sell at low prices. Toyota's regional sales manager in China has been told in a variety of ways that he will be cut next month. "under this kind of management measure, many dealers are required to report on the occurrence of low-price sales." The decision says.

Toyota China mainly has two kinds of problems: "reaching limited dealer network quotation and partial vehicle resale price agreement with dealers" and "implementing limited dealer network quotation and partial vehicle resale price agreement".

The Market Supervision and Management Bureau believes that Toyota China, with its own dominant position and strict management measures, has a strong binding force on the unified network quotation made by dealers and the restrictions on the resale price of some models. This behavior excludes and restricts market competition and harms the interests of consumers.

The fine is equivalent to 2% of Toyota's sales in Jiangsu Province in 2016, or 87.6131 million yuan.

At present, it is not known whether other provinces and cities will follow up the investigation and punishment.

"We apologize for causing trouble to Chinese customers," Toyota said on December 27. At the same time, it said it would require Chinese legal persons to take comprehensive measures to prevent similar incidents from happening again.

Finally, many netizens on the Internet think that Lexus is so arrogant in China that consumers are used to it and is called "selling cars on their knees." there is also a certain degree of truth in this saying, after all, there are not many brands selling cars at higher prices these days. Lexus has such a brilliant success in the Chinese market today, thanks to products, word-of-mouth, service, and loyal customers, will it affect the reputation and sales of the Lexus brand after price increases and fines? However, the price problems and disputes in Lexus may continue to reappear in the future.

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