CRI听力: Toyota Offers No Compensation for Chinese Consumers

Toyota claimed that they won't offer any form of compensation to owners of RAV4 models recently involved in the recall in China over accelerator pedal problems. Consumers in China are questioning the company's different attitudes in China and the U.S.

Let's take a closer look with reporter Liu Min.



Chinese customers are wondering why Toyota's face-changing is much quicker than its acceptance of responsibility in the recall incident. After a series of negotiations at the end of March, a Toyota delegation agreed with Zhejiang province's Commercial and Industry Bureau to compensate local customers of its RAV4 vehicles. However, just two days later, Toyota's top management claimed that they won't offer any compensation to Chinese consumers, including those in Zhejiang Province. A RAV4 owner in Beijing says he is very disappointed.

"At first when we heard the news from Zhejiang province, we were quite happy since we believed consumers from other places across the country would also receive similar compensation. However, two days later we learnt online that they've changed their mind and refused to honour their promise. Instead they are offering some kind of complimentary maintenance service."

Toyota refused to compensate Chinese consumers for time and travel cost losses due to the recall. Instead, they are now offering three free maintenance services for customers to choose from, including car security, wheel and air conditioning system checks. Industry insiders say this decision by Toyota is based on China's Administrative Regulations on Recalls of Defective Automobile Products released in 2004, which doesn't require automakers in China to provide any financial compensation to consumers. Car Industry Reviewer Nan Chen is critical of the regulations.

"I think so far the free maintenance service they are offering has provided some degree of compensation. However, we need to re-examine and update the relevant laws and regulations."

In fact, Toyota's total compensation to each RAV4 owner will not exceed 200 yuan since it hasn't caused any casualty in China. Thus, the total compensation payable on the 75,000 RAV4s will be no more than 15 million yuan, far less than what they have to pay in the United States. The U.S. Ministry of Communications recently announced a fine as high as 16 million U.S. dollars or 122 million yuan on Toyota, a record fine for a car maker. Now the courts in the U.S. has received more than 90 joint lawsuits against Toyota.

Nan Chen says the estimation is Toyota may need to compansate at least a total of three billion U.S. Dollars to these customers, with everyone received at least 500 Dollars.

"Toyota knew of the problem since last September, but delayed the recall until this January.
According to American Law, the government can punish them with this high fine. By comparison, the recall regulations in China are far from stringent and there isn't much of a deterrent to those who break them. That's why the manufacturers in China can deal with the local customers differently."

Last year, Toyota reaped more than 1 billion US Dollars from the Chinese market while its global sales suffered consecutive losses in 2008 and 2009. But according to a survey conducted by a portal website, 72 percent of netizens voted said that they would never buy Toyota cars, and 64 percent believed that the Toyota recall crisis has had a grave impact on Japanese automakers.

Analysts say the sales of Toyota cars in China this year may encounter cold market.

For CRI, I'm Liu Min.