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Japanese, German car parts manufacturers under probe for price
By KH디지털2Published : Jan. 28, 2015 - 09:17
South Korea's antitrust watchdog is investigating Japanese and German car parts manufacturers for price-fixing on products they sold to local automakers, a source said Wednesday.
The names of the companies under investigation and the parts supplied have not been made public, but the Fair Trade Commission (FTC) insider said Hyundai Motor Co. and its corporate cousin, Kia Motors Corp., bought the parts for the past several years. The two carmakers are flagships of Hyundai Motor Group, the world's fifth-largest automotive conglomerate.
The two companies sold some 8 million vehicles last year, and parts supplied by the foreign makers could have been used on quite a number of cars, the source said.
"The five or so companies being checked are suspected of having contacted each other ahead of the bidding to coordinate the prices of parts they were going to sell," the FTC source, who declined to be identified, said.
Such a practice allows suppliers to effectively control prices and pick in advance which company wins a particular bid.
"There are usually more than 30,000 parts that go into the making of a car, so higher component costs can push up the overall price of the finished product, which is particularly bad for large-volume brands like Hyundai and Kia who can't afford to lose their price competitiveness," said Kim Pil-soo, a professor of automotive studies at Daelim College.
The FTC said it cannot divulge any information and declined to predict what action could be taken if the foreign companies are found guilty.
It said the size of the fine depends on the extent of the price rigging and added that in serious cases, the local head of the foreign suppliers could face a criminal investigation.
The FTC in late 2013 slapped 114.6 billion won (US$106.2 million) in fines on foreign parts suppliers found to have fixed prices on meters used in cars and windshield wiper systems.
At the time, Denso Korea Electronics, Denso Korea Automotive, Continental Automotive Electronics and Bosch Electrical Drives were found to have engaged in illegal practices. (Yonhap)
The names of the companies under investigation and the parts supplied have not been made public, but the Fair Trade Commission (FTC) insider said Hyundai Motor Co. and its corporate cousin, Kia Motors Corp., bought the parts for the past several years. The two carmakers are flagships of Hyundai Motor Group, the world's fifth-largest automotive conglomerate.
The two companies sold some 8 million vehicles last year, and parts supplied by the foreign makers could have been used on quite a number of cars, the source said.
"The five or so companies being checked are suspected of having contacted each other ahead of the bidding to coordinate the prices of parts they were going to sell," the FTC source, who declined to be identified, said.
Such a practice allows suppliers to effectively control prices and pick in advance which company wins a particular bid.
"There are usually more than 30,000 parts that go into the making of a car, so higher component costs can push up the overall price of the finished product, which is particularly bad for large-volume brands like Hyundai and Kia who can't afford to lose their price competitiveness," said Kim Pil-soo, a professor of automotive studies at Daelim College.
The FTC said it cannot divulge any information and declined to predict what action could be taken if the foreign companies are found guilty.
It said the size of the fine depends on the extent of the price rigging and added that in serious cases, the local head of the foreign suppliers could face a criminal investigation.
The FTC in late 2013 slapped 114.6 billion won (US$106.2 million) in fines on foreign parts suppliers found to have fixed prices on meters used in cars and windshield wiper systems.
At the time, Denso Korea Electronics, Denso Korea Automotive, Continental Automotive Electronics and Bosch Electrical Drives were found to have engaged in illegal practices. (Yonhap)
