Toyota-Ukraine: No pay? No go!
Many people hope that large international companies will bring more civilized business standards to Ukraine. We used to think, that processes and procedures at foreign companies are performed transparently, without bribes and nepotism, and that our national enterprises, starting working with them, will have to meet those international standards of fairness. Unfortunately, practice shows that this is not the case at all. The example of Toyota-Ukraine clearly displays how corruption affects the Ukrainian divisions of international companies.
Strange suspension
On June 30, 2021, Toyota-Ukraine is terminating the powers of its official dealer in Chernihiv region — Joint Company SIVER-AUTO LLC (SIVER-AUTO). The company was just given time to wind down. This decision will hit not only the employees of SIVER-AUTO (that means more than 70 people of staff, many of whom will lose their jobs). It can also negatively affect customers — they will not be able to receive the already purchased cars, because the company’s got a ban on their shipment. The local budget will also suffer — since less tax will fall into it. For comparison, the previous year SIVER-AUTO paid about 6 million hryvnas taxes. Moreover, obviously, this decision will seriously damage the reputation of Toyota brand not only in Chernihiv region, but throughout Ukraine.
It would seem that nobody benefits from breaking the dealer contract with SIVER-AUTO. Its customers note that they are completely satisfied with this dealer’s services and that they would like to continue cooperating with this Company. The SIVER-AUTO’s performance indicators of last years have been rapidly improved, and the dealer is totally meeting the high standards of Toyota. For a number of indicators, SIVER-AUTO demonstrates a decent level among dealers in Ukraine. Then there is a question — how and why was this decision made?
Who benefits from?
Several Chernihiv companies are applicants for the dealer’s position. This situation is definitely favorable to MAGR-AUTO, which pretends to become a new Toyota dealer in the region. The founder of MAGR-AUTO — Serhii Maslennikov — is involved in several corruption schemes. As a deputy of Chernihiv City Council, he has an experience of the city transport stops building, by cost of a half a one-room apartment per each. At the same time, he bought an elite Volvo XC90 T6 car, costing 2 million hryvnas.
Also, Serhii Maslennikov is a participant in a criminal case about the embezzlement of about 32 million hryvnas of budgetary funds, in the fulfilling of the order for the Ministry of Defense of Ukraine.
At the same time, both MAGR-AUTO and the second contender for the dealership — the METEK Company — fall short of the standards set for Toyota dealers in several key parameters. In light of this disparity, the decision of the Japanese head office to break off relations with the current dealer, replacing with a MAGR-AUTO or METEK contract, — looks even more strange. However, if we assume that there is a corruption scheme behind this transposition, everything falls into place.
Standard Practice
Commenting on the situation around SIVER-AUTO, members of the Ukrainian official car dealers’ community note that something like this was to be expected. Toyota Ukraine has long earned a reputation for corruption and informal agreements. Among market participants, the strong opinion has already been set: if you want to cooperate with Toyota, prepare a bribe for the local management.
Notifications from dealers about corruption in Toyota happened earlier too, but none of them has led to such shocking consequences. Nevertheless, the attempt to hush up the scandal around SIVER-AUTO did not work out — it was too egregious.
The case with SIVER-AUTO shows how much corruption in Toyota’s Ukrainian division has been expanded. Dealer status can be revoked even after ten years of successful cooperation. Moreover, this can happen suddenly, even without giving time to fulfill obligations to customers. Just because another applicant offered an impressive amount of money for this status.
It turns out that even cooperation with a huge international company in Ukraine does not guarantee the expected benefits from a civilized business — neither honesty of tenders, nor the transparency of decision-making processes. Even with such — seemingly reliable — parent company, your business may suddenly stop functioning: not because of your own problems, but owing to someone’s personal corruption interests.
See Ukrainian original text:
https://stopcor.org/tojota-ukrayina-ne-pidmazhesh-ne-poyidesh/