FTC fines Denso, NGK 1.78 billion won for collusion

The Korean antitrust watchdog slapped a 1.78 billion won ($1.5 million) fine on two Japanese auto parts suppliers for colluding to fix prices in a bid for a General Motors deal that included vehicles manufactured from its plants here in Korea.

The fine on the two Japanese auto suppliers’ is the Korean antitrust watchdog’s ninth penalty on an international auto parts cartel since 2013.

Denso and NGK were found guilty of collaborating to fix bidding prices when applying for oxygen sensors also known as Lambda senor on an international GM bid held between June and September 2008, the Fair Trade Commission said Monday.

The oxygen sensors were installed on three engines, FAM1 GEN4, B-DOHC GEN2 and L850 GEN2 that were manufactured in Korea, Europe, North and South America. Two engines were installed on small and midsize vehicles while another engine was installed on compact vehicles. These vehicles are manufactured at GM Korea’s plant in Bucheon, Gyeonggi.

The FTC said the recent penalty, however, did not include sensors that were installed on the L850 GEN2, as they were engines that were supplied from GM’s North America and China production plants. The two Japanese companies agreed to work together so that they could continue to supply oxygen sensors to GM.

The companies allegedly colluded several times between July and September 2008. Denso agreed to apply for the front sensor while NGK would win the rear sensor. It has been said GM was looking into the possibility of choosing Denso to work on the front sensor, which gave the opportunity for agree that NGK would bid to work on the rear sensor instead of competing for the same order.

The FTC said both companies kept the bidding price high. The Korean FTC has fined Denso 1.04 billion won and NGK 741 million won.

Denso, which was founded in 1949, is the largest stakeholder of Japan’s leading automaker Toyota.

“This is the ninth international cartel we have found on automotive parts since December 2013,” said an FTC official.

In March 2015, the two Japanese auto parts suppliers were fined 1.4 billion won for colluding on a Hyundai Motor Group bid on a sensor. Denso has been caught by the FTC for colluding on bids six times since 2013.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]