China fines Japanese auto parts makers record $201 mln for price-fixing (updated)

NSK

20/08/2014 09:21

* NDRC says 12 Japanese parts makers violated anti-monopoly 
law 
    * Yazaki, Sumitomo Electric, Denso, NSK among fined firms 
    * Auto sector under scrutiny by Chinese regulators 
    * Follows crackdown on parts makers by EU, U.S. regulators 
 
 (Adds details on auto parts makers and fines, quotes from NDRC 
and expert) 
    By Matthew Miller and Yoko Kubota 
    BEIJING/TOKYO, Aug 20 (Reuters) - 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 
 5802.T  was the hardest hit by the NDRC with a 290.4 million 
yuan fine. 
    Denso Corp  6902.T  and Mitsubishi Electric Corp  6503.T  
were also among the 12 auto parts makers the NDRC said its 
investigation showed had colluded to reduce competition and 
establish favorable 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 on Wednesday. 
    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  MJN.N  and Danone SA  DANO.PA  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, with the aim of 
protecting consumers.  
    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. ID:nL5N0QO1MB  
    The NDRC also said it would punish Audi and Fiat SpA's 
 FIA.MI  Chrysler for monopoly practices. Executives at Toyota 
Motor Corp  7203.T  said the government was looking into the 
auto parts policies of its premium brand, Lexus. 
    In a commentary published on Wednesday, 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. 
    "China is a country ruled by law, everyone should be equal 
before the law," Li Pumin, NDRC's secretary general, told 
reporters earlier.  ID:nB9N0OY00D  
     
    GLOBAL SCRUTINY 
    The anti-trust law stipulates fines of between 1 and 10 
percent of a company's revenues for the previous year for 
anti-competitive practices. 
    Fines for the Japanese firms ranged from 4 to 8 percent 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  5801.T  and ball bearing makers NSK Ltd  6471.T , 
NTN Corp  6472.T  and Jtekt Corp  6473.T .   
    Hitachi Automotive, a subsidiary of Hitachi Ltd  6501.T , 
along with bearings maker Nachi-Fujikoshi Corp  6474.T  were 
found to have engaged in anti-competitive behaviour but were not 
fined since they were the first to provide evidence to the 
regulator, the NDRC said. 
    All 12 companies also vowed to take corrective measures to 
change sales practices that violated the law, the regulator 
added. 
    Some of these Japanese auto parts makers have also been 
fined by U.S. and European regulators. They include Denso, 
Yazaki and Furukawa. Several European auto parts makers such as 
Autoliv and Leoni have also been affected. 
    ($1 = 6.1446 Chinese yuan) 
 
 (Reporting by Matthew Miller in BEIJING and Yoko Kubota in 
TOKYO; additional reporting by Koh Gui Qing and Beijing 
Newsroom; Editing by Miral Fahmy) 
 ((guiqing.koh@thomsonreuters.com; +86 10 6627 1242; Reuters 
Messaging: guiqing.koh.reuters.com@reuters.net)) 
 
Keywords: CHINA ANTITRUST/AUTOS