China fines Japanese auto parts makers record $201 million for price-fixing

BEIJING/TOKYO (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.

Mitsubishi Motors Corp's the i-MiEV electric vehicles are reflected on an external wall during an unveiling at the company headquaters in Tokyo June 5, 2009. REUTERS/Issei Kato

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 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 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.

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.


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.

Reporting by Matthew Miller in BEIJING and Yoko Kubota in TOKYO; additional reporting by Koh Gui Qing and Beijing Newsroom; Editing by Miral Fahmy