Large-vehicle makers fined $104 millionThe Fair Trade Commission yesterday announced a total of 116 billion won ($104.3 million) in fines against seven manufacturers of large commercial vehicles for fixing the prices of eight-ton dump trucks, tractors and cargo trucks.
Seven companies - Hyundai Motor, Daimler Trucks Korea, Volvo Group Korea, Scania Korea, Tata Daewoo Commercial, Daewoo Songdo and MAN Truck & Bus Korea - will also receive corrective orders, the FTC said.
Hyundai Motor was fined 71.7 billion won, Scania Korea 17.5 billion won, Volvo Group Korea 16.9 billion won and Daimler Trucks Korea 4.7 billion won.
According to the FTC, the companies avoided competition by regularly sharing plans for price increases, sales and other promotions, discount rates and size of inventories from 2002 to 2011.
During the period, prices for large commercial vehicles rose steadily, regardless of market conditions. Employees of the accused companies met 55 times during the period and exchanged information through e-mail three or four times a month.
The FTC said the companies used the information to determine profit margins and when to raise prices.
“Employees of each company stayed in touch via telephone to determine prices. When a competitor raised prices, they exchanged price-fixing views such as whether to follow the price hike or consider it when the margin of increase is determined,” said an FTC official.
As a result of such fixing, the FTC said the average price of large dump trucks, which was about 170 million won in 2008, soared to 190 million won in 2010 and 210 million won in 2011.
In addition, the FTC found that the price of domestically manufactured tractors also jumped from an average of 85 million won in 2008 to 110 million won in 2011.
“Implicit consensus through exchange of information is also considered price fixing. We hope that this sanction will lead to practical benefits for individuals and small businesses that use large cargo commercial vehicles,” said an FTC official.
As of 2011, Hyundai Motor accounted for 37.5 percent of the dump truck market, Volvo 30.6 percent and Scania 12.2 percent.
In the tractor market, Hyundai controlled 27.8 percent of the market, followed by Volvo (18.7 percent) and Daimler (18.2 percent).
The cargo truck market is a duopoly structure with Hyundai Motor controlling 62.8 percent and Tata Daewoo 35.3 percent, as of 2011.
BY KIM JUNG-YOON [email@example.com]
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