By Kang Seung-woo
The nation’s top two automakers and a leading auto parts manufacturer are under investigation by an antitrust watchdog over suspicions that they pressured their subcontractors to slash prices.
According to the Fair Trade Commission (FTC) Thursday, its team visited the headquarters of Hyundai Motor, Kia Motors and Hyundai Mobis, Hyundai Motor’s affiliate, in southern Seoul on Tuesday and secured related documents.
The vehicle manufacturers usually negotiate with about 2,000 subcontractors twice a year to set supply prices and the latest meeting took place last month.
But subcontractors have complained about the negotiations, calling them a formality and that Hyundai and Kia have brandished their market-dominating power in forcing them to cut prices.
Hyundai and Kia have dismissed the allegations, saying that they carry out price cuts as part of their overall cost reduction program and that action is only taken in collaboration with their partners.
“We never abuse our superior position in the market,” a Hyundai official said.
Despite the explanation, history and track records are not on the automakers’ side.
In 2006, the FTC fined Hyundai Motor about 1.6 billion won ($1.5 million) on similar charges. The automaker denied the charges, but a Seoul court upheld the FTC’s ruling last month.