Japan’s fair trade watchdog issues warning to Toyota subsidiary

Japan’s antitrust watchdog found that a Toyota Motor Corp. subsidiary forced about 50 subcontractors to store molds of car parts at no cost and plans to warn the group company to take steps to prevent a recurrence of the problem, a source familiar with the matter said Sunday.

Toyota Customizing & Development Co., in which Toyota owns a 90.5 percent stake, admitted to violating the law on subcontracting agreements, the sources said.

The subsidiary, which produces auto parts, ambulances and racing cars, allegedly forced about 50 suppliers to withhold more than 650 molds and inspection instruments for parts used in its previous vehicles, even though it had no plans to place new orders.

Suppliers apparently complied because they feared losing orders from Toyota Customizing & Development.

The file photo, taken in March 2023, shows the building housing the Japan Fair Trade Commission in Tokyo. (Kyodo)

Japan’s Fair Trade Commission also suspects that the Toyota Group has returned more than 50 million yen ($310,000) worth of spare parts to more than 60 suppliers without giving a valid reason.

In March, the FTC issued a warning to Nissan Motor Co. for illegal understatement of payments to 36 subcontractors. The underpayments totaled more than 3 billion yen ($19 million) over about two years.

Related scope:

Toyota shareholders reappoint CEO Toyoda amid testing scandals

The Japanese government is inspecting Honda and Mazda over improper vehicle certification

Toyota and Mazda suspend production of 5 models due to certification scandal