Mitsubishi, Hitachi punished for price fixing

The Fair Trade Commission's main office in Sejong

By Kwak Yeon-soo

The Fair Trade Commission (FTC) said Sunday it has decided to slap a total of 9.2 billion won ($7.6 million) in fines on four Japanese auto parts suppliers for allegedly colluding to maintain or raise prices of alternators and ignition coils.

According to the corporate watchdog, the four auto parts firms ― Mitsubishi Electric, Hitachi Automotive Systems, Denso Corporation and Diamond Electric ― colluded to rig prices of alternators and ignition coils sold in Korea, between 2004 and 2014.

Among the four, Mitsubishi Electric and Hitachi Automotive Systems were fined 80 billion won and 4.1 billion won, respectively, and were also referred to the prosecution.

Denso Corporation and Diamond Electric were fined a respective 4.2 billion won and 2.6 billion won.

Mitsubishi, Hitachi and Denso agreed to share related information on alternators in order to jointly respond to calls for price cuts, according to the FTC. When automaker clients sent requests for a quotation, sales personnel of the three firms gathered to fix prices.

As a result, automotive alternators from Mitsubishi was sold to Renault Samsung's QM5 until the model's production was discontinued in 2016.

Hyundai Motor and its affiliate Kia Motors account for 70 to 80 percent of the domestic demand, while the main suppliers of the domestic alternator market are Valeo Group, BorgWarner, Denso and Mitsubishi.

Meanwhile, Diamond, Mitsubishi and Denso agreed on Denso's right to sell its ignition coils to Hyundai Motor's Grandeur HG model, Kia Motors' K7 VG model until 2017.

When automaker clients invited bids for the auto parts, Diamond gave up the bid to defend Denso while Mitsubishi intentionally presented higher prices than Denso's prices.

Korea's Yura Tech and Japan's Denso currently account for the largest market shares in the local ignition coil market depending on the type of product, the FTC said.

“By imposing sanctions on cartel activities in key auto parts, we expect to see improved competitiveness in the industry,” an FTC official said.

The antitrust regulator said it has been investigating the case along with its counterparts in the U.S., Canada, the European Union and Japan.