China has fined Japanese auto parts makers a record 1.235 billion yuan ($201 million) for manipulating prices as the government steps up its enforcement of an anti-trust law that has targeted major corporations and revived protectionism concerns.
The fines, the largest so far meted out by the pricing regulator, the National Development Reform Commission (NDRC), follow a global crack down including in the United States and Europe on price collusion in the auto parts sector, which has also mostly affected Japanese companies.
In China, parts maker Sumitomo Electric Industries Ltd was the hardest hit by the NDRC with a 290.4 million yuan fine.
Denso Corp and Mitsubishi Electric Corp were also among the 12 auto parts makers the NDRC said its investigation showed had colluded to reduce competition and establish favourable pricing on their products.
The agreements were in violation of China’s anti-monopoly law and “improperly affected the pricing for auto parts, entire vehicles and bearings”, the NDRC said in a statement published on its website yesterday.
China is intensifying its efforts to bring companies into compliance with the anti-monopoly law enacted in 2008, and has in recent years slapped foreign companies including Mead Johnson Nutrition Co and Danone SA with hefty fines.
Legal experts, however, point out that the authorities appear to have wielded the law against more foreign multinationals than local companies. Officials say the law is applied to both domestic and foreign firms.
China’s auto sector, which is the world’s largest and dominated by foreign brands, has been under particular scrutiny amid accusations by state media that global car and parts makers are overcharging customers.
Xinhua news agency reported earlier this month that Mercedes-Benz has been found guilty of manipulating prices for after-sales services in China.
The NDRC also said it would punish Audi and Fiat SpA’s Chrysler for monopoly practices. Executives at Toyota Motor Corp said the government was looking into the auto parts policies of its premium brand, Lexus.
In a commentary published yesterday, the official Xinhua news agency said foreign companies saw China’s auto sector as a prized piece of “fat meat”, and that the regulators were acting like a “sword” to protect consumer interests.
The anti-trust law stipulates fines of between 1 and 10 per cent of a company’s revenues for the previous year for anti-competitive practices.Fines for the Japanese firms ranged from 4 to 8 per cent of sales, the NDRC said, although it was not immediately clear whether that amount included sales of the investigated products or total China sales for a specific period.
The companies fined include wire harness maker Furukawa Electric Co and ball bearing makers NSK Ltd, NTN Corp and Jtekt Corp.
All 12 companies also vowed to take corrective measures to change sales practices that violated the law. Some of these Japanese auto parts makers have also been fined by US and European regulators. They include Denso, Yazaki and Furukawa. Several European auto parts makers such as Autoliv and Leoni have also been affected.