Car News

Japanese cartels get US$200m fine

A GROUP of 12 Japanese manufacturers of auto parts and bearings have been found guilty of violating China’s Anti-Monopoly Law, with 10 of them fined a combined 1.24 billion yuan (US$201.8 million).

The penalty is the largest ever issued by the National Development and Reform Commission in the six-year history of the legislation and came following an antitrust probe into the sector.

The 12 companies, which comprised eight auto parts manufacturers — Hitachi, Denso, Aisan, Mitsubishi Electric, Mitsuba, Yazaku, Furukawa, Sumitomo — and four bearing makers — Nachi, NSK, JTEKT and NTN — were found guilty of operating cartels that fixed prices and manipulated the market, the NDRC, which is responsible for price regulation, said yesterday.

Despite being implicated in the probe, Hitachi and Nachi escaped financial punishment as they were the first to offer evidence of their illicit practices, it said, without elaborating.

According to the findings of the investigation, the eight auto parts manufacturers met frequently in Japan between January 2000 and February 2010, where in small groups and as a whole they negotiated price agreements designed to reduce competition.

The cartel agreed prices on 13 parts destined for the Chinese market, including starter motors, alternators and throttle bodies for more than 20 models produced by Honda, Toyota, Nissan, Suzuki and Ford.

The price-fixing activity continued through the whole of last year, the NDRC said.

Similarly, the four bearing makers were charged with coordinating price increases for products sold in China based on deals reached at meetings held in Japan and Shanghai between 2000 and 2011.

The anti-competitive practices, which harmed the interests of carmakers and rights of consumers for more than a decade, represented a serious violation of China’s Anti-Monopoly Law and merited severe punishment, the commission said.

Under the terms of the legislation, violators can be fined up to 10 percent of their sales revenue for the year prior to being charged.

Among the parts manufacturers, Denso was fined a relatively lenient 4 percent of its 2013 sales, or 150.6 million yuan, to reflect its efforts in cooperating with the investigation.

Yazaki, Furukawa, and Sumitomo, which colluded on the pricing of just one auto part, were each fined 6 percent of last year’s revenue, or 241.1 million yuan, 34.6 million yuan and 290.4 million yuan, respectively.

Aisan, Mitsubishi Electric and Mitsuba, which were found to be involved in more than two price-fixing cases, were fined 8 percent of their sales revenue, or 29.8 million yuan, 44.9 million yuan, 40.7 million yuan, respectively.

Within the bearings cartel, NSK was fined 4 percent, or 174.9 million yuan, for cooperating with the inquiry, while NTN was charged 6 percent, or 119.2 million yuan, and JTEKT, which was found to have initiated the price-fixing agreements, 8 percent, or 109.4 million yuan.

All of the companies involved in the cases have outlined measures to rectify their sales policies and behavior, the commissioin said, adding that it will continue to investigate other violations identified during the probes.

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