The Competition Tribunal yesterday confirmed a settlement agreement between the Competition Commission and WesBank, Toyota Financial Services South Africa (TFS), Toyota Motor Corporation (TMC), Toyota Financial Services UK (TFSUK), and Toyota South Africa Motors (TSA).
The agreement, which involves the payment of a R30-million administrative penalty without any admission of liability, marks the resolution of a protracted dispute over alleged anti-competitive practices in the wholesale and retail financing of Toyota vehicles.
The settlement stems from allegations that the parties engaged in market division by allocating suppliers and customers, potentially violating section 4(1)(b)(ii) of the Competition Act.
The case originated from a shareholder agreement establishing a joint venture for TFS, in which FirstRand (through its subsidiary WesInvest Holdings), TSA Investment Holdings Limited, and Toyota Motor Finance (UK) plc each held a 33.3% stake.
The agreement included restrictive clauses that allegedly divided the market by allocating customers and suppliers. Specifically, it barred WesBank – a division of JSE-listed FirstRand – from directly providing motor vehicle finance to customers purchasing new Toyota, Lexus, or Hino vehicles, as well as used vehicles sold through authorised Toyota dealerships (with an exception for the McCarthy Group). Instead, all such applications were channelled to TFS.
The Competition Commission launched a probe into the JV’s operations. By February 2022, the investigation had uncovered sufficient evidence to refer the matter to the Competition Tribunal for prosecution. The referral named FirstRand Bank, WesBank, and TFS as respondents, accusing them of collusive conduct that divided the market for vehicle finance.
The Commission found that the agreement prevented WesBank from soliciting or accepting finance applications directly from Toyota dealership customers. All such inquiries were funnelled to TFS, creating a de facto monopoly for the JV in that segment. This was seen as a per se contravention of the Competition Act. The potential penalty sought was substantial: up to 10% of each party’s annual turnover in South Africa.
WesBank vigorously denied the allegations, describing the JV as a “legitimate and reasonable” commercial arrangement rather than cartel behaviour. It said the partnership enhanced customer service and efficiency, not restricted competition. Toyota entities similarly maintained its innocence, arguing the structure was standard industry practice.
The Tribunal’s confirmation of the agreement concludes all matters between the Commission and the respondents.
The R30m fine will be shared among the five respondents. In addition, the agreement’s restrictive clauses will be eliminated, allowing WesBank to compete freely for financing at Toyota dealerships.
Competition Commissioner Doris Tshepe hailed the outcome as a win for consumers, stating: “The removal of the restrictions that prevented WesBank from financing vehicles will provide customers with a wider choice when selecting vehicle financiers to finance vehicles purchased from authorised Toyota dealerships.”
WesBank welcomed the resolution of the matter.
Although WesBank has agreed to make certain changes to the execution of its JV agreement with TFS, the agreement remains in place.
“WesBank will continue not to compete on the dealer floor with [TFS], line with the joint venture agreement,” it said. “However, should customers wish to come directly to WesBank, or use one of WesBank’s digital channels, that will be accommodated in line with the agreement with the Competition Commission. This will ensure continued competition and best options to customers.”
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