Fair Trade Commission: "Hwasung, Dongil, and others colluded in Hyundai Kia parts bids for 12 years... Imposed 82.4 billion won in fines"

[Sejong=Asia Economy Reporter Joo Sang-don] Four automobile parts manufacturers, Hwasung R&A, DRB Dongil, AIA, and Yuil Rubber, were caught by the Fair Trade Commission for colluding in Hyundai Kia Motors' parts procurement bids for 12 years.

On the 24th, the Fair Trade Commission announced that it decided to impose corrective orders (future conduct prohibition orders) and a total fine of 82.439 billion KRW on the four businesses that colluded on the winning bidders and bid prices.

According to the Fair Trade Commission, the four automobile parts manufacturers, including Hwasung, agreed in advance on the winning bidders and bid prices in a total of 99 automobile parts procurement bids conducted by Hyundai and Kia Motors from 2007 to 2018, about 12 years, and executed these agreements.

When Hyundai Kia Motors conducted procurement bids for glass runs and weatherstrips while developing new models of existing car types, they agreed in principle to designate the supplier who had delivered parts for the existing model as the winning bidder. When the actual bid was held, the companies agreed on bid prices so that the designated company could win the bid and participated accordingly. In cases where Hyundai Kia Motors developed new models such as Palisade and Seltos, or when there were concerns about sales decline or factory operation rate reduction for certain businesses, the winning bidders were decided through separate agreements. As a result, following the agreements, the designated winning bidders won in 81 out of the total 99 bids.

Accordingly, the Fair Trade Commission imposed corrective orders and a total fine of 82.439 billion KRW on these four companies. The fines by company are ▲Dongil 42.399 billion KRW ▲Hwasung 31.557 billion KRW ▲AIA 4.562 billion KRW ▲Yuil 3.921 billion KRW.

Jeon Sang-hoon, head of the Cartel Investigation Division at the Fair Trade Commission, said, "This is a case where we detected and sanctioned collusion that was secretly conducted over a long period in the automobile parts procurement bid market, serving as a warning to the related industry. We will strengthen monitoring of collusion in intermediate goods markets that degrade industrial competitiveness both upstream and downstream, and will respond strictly when violations of the law are detected."

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