By Lee Hyo-sik
Denso and Delphi were fined for colluding on bids to supply auto parts at artificially high prices to Hyundai, Kia and other domestic automakers, the country's antitrust agency said Tuesday.
The Fair Trade Commission (FTC) said Denso Korea Automotive, a local unit of Japanese auto parts giant Denso, and Hyundam Industries, a local fuel pump maker, colluded from August 2007 to February 2009.
Prior to every bid, the two firms met to decide which was going to win supply contracts. Through the collusion, they were able to keep the prices of fuel pumps high at the expense of carmakers, the FTC said.
The agency imposed a 17 billion won ($15 million) fine on Hyundam, which controls 56 percent of the country's fuel pump market, and a 13 billion won fine on Denso Korea, which accounts for about 42 percent of the market.
Denso Korea also colluded with Delphi Powertrain to supply a variable valve timing (VVT) device to automakers at higher prices. The device helps improve performance and fuel economy by altering the timing of the valves.
When the two companies were pressured by local carmakers to lower the prices of the VVT device, they met in June 2009 and agreed not to supply the part to each other's clients, according to the FTC, which said the collusion lasted through May 2012.
Denso was fined 3.9 billion won and Delphi 3.4 billion won.
"We imposed more than 37 billion won in fines on three auto parts makers, which illegally colluded to counter price-cut pressure from domestic carmakers and maintain their profitability," an FTC official said.
"We believe the latest action will help strengthen the competitiveness of local automakers and bolster consumer wellbeing. We will continue to monitor any illicit activities among auto parts suppliers and take stern action against lawbreakers."
Denso and Delphi were fined for colluding on bids to supply auto parts at artificially high prices to Hyundai, Kia and other domestic automakers, the country's antitrust agency said Tuesday.
The Fair Trade Commission (FTC) said Denso Korea Automotive, a local unit of Japanese auto parts giant Denso, and Hyundam Industries, a local fuel pump maker, colluded from August 2007 to February 2009.
Prior to every bid, the two firms met to decide which was going to win supply contracts. Through the collusion, they were able to keep the prices of fuel pumps high at the expense of carmakers, the FTC said.
The agency imposed a 17 billion won ($15 million) fine on Hyundam, which controls 56 percent of the country's fuel pump market, and a 13 billion won fine on Denso Korea, which accounts for about 42 percent of the market.
Denso Korea also colluded with Delphi Powertrain to supply a variable valve timing (VVT) device to automakers at higher prices. The device helps improve performance and fuel economy by altering the timing of the valves.
When the two companies were pressured by local carmakers to lower the prices of the VVT device, they met in June 2009 and agreed not to supply the part to each other's clients, according to the FTC, which said the collusion lasted through May 2012.
Denso was fined 3.9 billion won and Delphi 3.4 billion won.
"We imposed more than 37 billion won in fines on three auto parts makers, which illegally colluded to counter price-cut pressure from domestic carmakers and maintain their profitability," an FTC official said.
"We believe the latest action will help strengthen the competitiveness of local automakers and bolster consumer wellbeing. We will continue to monitor any illicit activities among auto parts suppliers and take stern action against lawbreakers."
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