South African vehicle manufacturers are colluding with importers and dealers to fix prices, impeding competition, the Competition Commission has said.
But companies such as Volkswagen South Africa (VWSA) and BMW South Africa have denied any wrongdoing.
The commission launched a probe into the multi-billion-rand industry last year, saying it had found evidence of possible widespread violation of the Competition Act. This followed a public outcry over high prices.
In a statement, the commission said the probe had found most of the country's main manufacturers, subsidiaries of the world's vehicle manufacturing giants, had colluded with distributors to fix prices of new cars and restrict discounts on used cars.
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| 'BMW invites the Commission to provide us with the evidence to which it referred' |
Manufacturers sold a record 449 603 new vehicles last year and exported 111 253.
Last year, the commission slapped a R12-million fine on the local unit of Japan's Toyota for compelling dealers to sell at minimum prices.
BMW SA has vowed to contest any action against it.
"We have not seen any of the evidence referred to by the commission in its press statement and have not been informed of the contraventions it alleges we are guilty of," said Richard Carter, spokesperson for BMW.
"We co-operated fully with the commission during its investigation by providing information and documentation."
Carter said the company was confident that it had not contravened the Competitions Act.
"BMW invites the Commission to provide us with the evidence to which it referred," he said.
The commission announced on Tuesday that its investigations unearthed practices hostile to competition by motor manufacturers, dealers, importers and distributors.
The commission's spokesperson, Menzi Simelani, said a case involving collusion and maintenance of prices would be referred to the Competition Tribunal for prosecution.
Simelani said the commission's analysis to date showed that "new car prices in our country are much higher than in other countries".
"The investigation was initially dubbed a collusion investigation into price-fixing by manufacturers, (but it) became broader and included investigations into anti-competitive practices in the industry, including manufacturers, dealers, importers and distributors."
An investigation into the exploitation of market dominance by manufacturers and importers to charge excessively for their products was under way.
Simelani said evidence of anti-competitive practices included contraventions of the Competition Act such as agreements that imposed restrictions that had the effect of substantially lessening competition.
Simelani said evidence revealed DaimlerChrysler SA (DCSA), BMW SA, Volkswagen SA, General Motors SA (GMSA), Nissan SA and their dealers had entered into franchise and dealer agreements which contained a number of restrictions that impacted negatively on competition in the market in which they operated.
Minimum resale price maintenance is banned by the Competition Act, but there was evidence that Volkswagen, Nissan, BMW, Citroen SA, DCSA and GMSA and Subaru SA either imposed minimum resale prices or agreed on minimum resale prices with their dealers.
The commission said it had to decide whether the Ford motor company had entered into similar agreements. No action would be taken against Honda SA, Renault SA, Hyundai SA, Volvo SA and Peugeot SA as no evidence had been found suggesting these companies used anti-competitive practices. - Sapa-Reuters
- This article was originally published on page 1 of Cape Times on June 01, 2005
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