MORE THAN 80 automotive component manufacturers are under investigation for allegedly colluding to fix prices and divide the market for the past 14 years.
The Competition Commission said on Monday the investigation was triggered when one of the firms in the cartels approached it for leniency from prosecution in exchange for information.
The commission said its probe echoed investigations in the United States, Europe and Asia. The manufacturers under investigation supplied parts to companies such as Toyota, Nissan, Isuzu, General Motors, Mazda and Ford.
Commissioner Tembinkosi Bonakele said the investigation would focus on cases that involved components that were in vehicles assembled in, and supplied to, SA’s market.
“We have not yet determined the extent of the harm, but cartels generally harm consumers and do foreclose certain players,” the commission said.
It has yet to be established if the cartel behaviour stifled the development of SA’s domestic parts industry.
Competition watchdogs in the US, Europe and Asia have uncovered several cartels in the past five years.
Inflated prices and collusive tendering have formed part of the conduct investigated by international authorities.
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The commission did not divulge the name of the company that approached it with the information relating to price-fixing, collusive tendering and market division. The component manufacturers allegedly colluded when bidding for tenders to supply their products to original equipment manufacturers.
According to US news reports last year, 20 companies and 21 executives were charged with price-fixing and bid-rigging involving $1,6bn for parts sold to US car manufacturers. The US started its investigation in 2010 and co-operated with European and other authorities.
In Europe, companies colluded to secretly co-ordinate their pricing strategy in the supply of ball bearings to automotive customers for more than seven years. Penalties of €953m were imposed.
National Association of Automobile Manufacturers of SA director Nico Vermeulen said on Monday the industry was surprised by the scale and the scope of the current investigation. More than 120 automotive components were affected by the collusion.
“The investigation must run its course. We do not want to pre-empt the outcome,” he said.
Vermeulen said the investigation seemed to relate mainly to imported components rather than locally manufactured ones since most of the manufacturers being investigated were Japanese. SA has about 300 suppliers of automotive parts.
Components affected by the collusion include inverters, electric power-steering systems, rear sunshades, pressure regulators and spark plugs.
Toyota senior corporate communication manager Mary Willemse said it could not comment on the effect of the alleged collusion at this stage. She said Toyota would co-operate with the commission’s investigation.
Manufacturers being investigated include Denso Corporation, Maruyasu, Hitachi, Mitsubishi Electric Corporation, Tokai Rika, Panasonic Corporation, Futaba Corporation and Fujitsu-Ten.
The commission did not comment on how advanced the investigation was or whether it would refer the conduct to the Competition Tribunal for adjudication in the near future.
Leana Engelbrecht, a senior associate in competition practice at law firm Cliffe Dekker Hofmeyr, said the commission had extensive powers.
“This includes summonsing parties to be interrogated by the commission and to provide the commission with relevant information and documentation, and conducting search and seizure operations (referred to as dawn raids) to obtain information that may be relevant.”
– Reuters/ AFP
