Toyota parts Distribution centre in Kempton Park Ekurhuleni.photo by Simphiwe Mbokazi 453

Johannesburg - South Africa’s vehicle component manufacturing sectors have expressed surprise and puzzlement at the Competition Commission’s announcement about its investigation into price fixing, market division and collusive tendering by 82 manufacturers.

The commission said yesterday that its investigation was prompted by information it had received that automotive component manufacturers colluded when bidding for tenders to supply 121 automotive components to original equipment manufacturers (OEMs).

The OEMs included some motor manufacturers that have local manufacturing operations – Toyota, Ford, General Motors and Nissan.

Spokespersons for these manufacturers confirmed that they would co-operate with the commission’s investigation if and as required.

The commission listed only a few of the 82 implicated companies. They were Denso Corporation, Maruyasu Industrial Company, Hitachi, Mitsubishi Electric Corporation, Tokai Rika Company, NGK Spark Plug Company, Mikuni Corporation, Aisin Industries Company, Panasonic Corporation, Futuba Corporation and Fijistu-Ten.

Competition Commissioner Tembinkosi Bonakele said yesterday that the commission’s investigation “into this pervasive collusive conduct” joined similar investigations launched in other jurisdictions internationally.

Bonakele said the commission would prioritise the investigation of cases that involved automotive components that were in vehicles assembled in and supplied to the South African market.

Nico Vermeulen, the director of the National Association of Automobile Manufacturers of South Africa, said the industry was “a bit surprised at the size and scope of the investigation”.

He said the names of the companies who had allegedly contravened the Competition Act appeared to be Japanese suppliers and the alleged offences related to imported components and not those locally manufactured and supplied.

Ken Manners, the vice-president of the National Association of Automotive Component and Allied Manufacturers, admitted being completely surprised by the commission’s announcement about the investigation.

Manners said it was strange but encouraging that the manufacturers listed by the commission included hardly any that manufactured in South Africa. “I really don’t know how the Competition Commission’s reach includes collusive activity outside the country.”

A MATTER OF VIABILITY

He added that there were few automotive component manufacturers in South Africa in competition for the same business because the volumes could not justify more than one company manufacturing a particular component.

However, Mava Scott, a Competition Commission spokesman, said the commission’s approach was to pursue all firms implicated “whether they are inside or outside South Africa as long as they have an impact on the South African market and contravene the Competition Act”.

Scott said what normally happened in practice was that an implicated firm outside the country would appoint a South African law firm to deal with whatever allegations there were against the company.

He confirmed more than one automotive component manufacturer had approached the commission and admitted involvement in these practices, and divulged information in return for immunity from prosecution in terms of the commission’s corporate leniency programme.

Scott said the commission would only take a decision on whether to grant these firms conditional immunity when it had finished evaluating the information.

Scott said the investigation launched by the commission was “huge” because it involved conduct taking place since 2000 to date.

Business Report