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Toyota agrees to pay US$200m to China dealers, group says

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Toyota Motor Corp has agreed to pay 1.24 billion yuan (US$200 million) to distributors for one of its Chinese joint ventures, according to the state-backed auto dealers group.

[BEIJING] Toyota Motor Corp has agreed to pay 1.24 billion yuan (US$200 million) to distributors for one of its Chinese joint ventures, according to the state-backed auto dealers group.

The payments to dealers for FAW-Toyota will be made in three installments, according to Song Tao, a deputy secretary general of the China Automobile Dealers Association.

The payout represents about half the 2.2 billion yuan in subsidies that the dealer's group had sought from the automaker in December to help meet costs resulting from excess inventory.

"The dealers are satisfied with the funding and so is the association and the automaker," Mr Song said in a mobile-phone text message.

Toyota China spokesman Niu Yu declined to comment and referred questions to the joint venture company, FAW-Toyota.

Phone calls to FAW-Toyota's offices went unanswered.

Retailers are banding together under the dealer group to demand lower sales targets and a bigger share of profit from vehicle sales from foreign automakers including Toyota, Renault SA and Bayerische Motoren Werke AG.

The protests also form part of a broader push by China's auto retailers to gain more autonomy from manufacturers, which currently dictate the number and type of cars they sell.

Toyota is contending with weaker-than-forecast deliveries in China, where it's falling further behind Volkswagen and GM. Last year, Toyota missed its goal for 1.1 million vehicle sales in the country.

BLOOMBERG