Japanese giant faces fine in SA over spark plug prices

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  • The Japanese spark plug manufacturer NGK is the latest in a growing line of car part makers being fined in South Africa.
  • After international competition authorities found them guilty of colluding and fixing prices in other markets, the local authority is now also claiming fines.
  • Last year, one Japanese supplier paid a local fine of almost R4 million.

The Japanese automotive part giant NGK could face a fine in South Africa after the Competition Commission accused it of fixing spark plug prices.  

On Thursday, the Competition Commission referred the company to the Competition Tribunal, recommending that NGK – along with its local subsidiary – should be prosecuted for price fixing, market division and collusive tendering.

The commission is currently investigating 63 automotive component manufacturers who are alleged to have colluded in 310 separate instances involving 92 automotive components.

It found that, from at least 2008, NGK colluded with Denso, another Japanese component manufacturer, after they were asked to quote for spark plugs for various Subaru models. A Competition Commission spokesperson confirmed that these prices were fixed outside South Africa, as part of an international tender.

NGK has already been fined in South Korea, and by the European competition watchdog, for collusion. 

The commission is demanding an administrative penalty equivalent to 10% of the annual turnover of either NGK limited or its local subsidiary. The Japanese giant’s revenue for the past year was almost 428 billion yen (R56 billion).

Last year, another Japanese component manufacturer, Yazaki Corporation, agreed to pay an administrative penalty of R3.8 million following allegations of price fixing and collusion in the supply of wire harnesses (the set of wires that run through a vehicle) to Honda, Toyota and Renault-Nissan.

Separately, the Japanese component supplier Sumitomo Electric Industries Ltd (SEI) agreed to pay an administrative penalty of almost R440 000 following accusations of price fixing, market division and tender collusion in relation to Toyota parts used in vehicles sold in South Africa.

The local competition authorities found that SEI and Denso worked together to set prices for heater control panels and electronic control units in various Toyota models, including the Prado and Yaris.

Last year, the German group Mahle also agreed to pay an administrative penalty in South Africa of R1.6 million after the commission alleged that it colluded with Denso in the supply of heating, ventilation and air conditioning units to Volkswagen, Daimler and BMW outside of SA.

The penalties followed a ruling by the European competition authorities.

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