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Naamsa surprised by scope of commission’s auto-parts probe

7th November 2014

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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The investigation into the automotive components sector, announced by the South African Competition Commission in October, has its origins in the US, Europe and the East, says National Association of Automobile Manufacturers of South Africa (Naamsa) director Nico Vermeulen.

“As Naamsa, we are surprised by the scope of the investigation, which, in the main, appears to be focused on imported components, and not locally made components.”

Based on that, Vermeulen says he does not expect the investigation to have any significant effect on the image and reputation of the South African automotive industry.

He emphasises, however, that it is important for the industry to comply, “as a business imperative”, with local and international competition law.

Naamsa president Dr Johan van Zyl adds that the local vehicle manufacturing industry will cooperate with the commission in its probe, “in any way it could”.

However, he notes that vehicle manufacturers are components buyers, and, therefore, not the target of the investigation.

National Association of Automotive Components and Allied Manufacturers of South Africa executive director Robert Houdet concurs with Vermeulen that it appears that the commission’s investigation is targeting international companies, and not local components makers.

‘Collusive Tendering’
The Competition Commission says it has launched an “investigation into price fixing, market division and collusive tendering in the market for the manufacture and supply of automotive components to original-equipment manufacturers” (OEMs, or vehicle manufacturers) such as Toyota, Daihatsu, Nissan, Isuzu, Fuji Heavy Industries (Subaru), Honda, Suzuki, General Motors, Hyundai, Yamaha, Volvo (cars), Mazda, Mitsubishi and Ford.

The commission says an investigation has been opened into the operations of a number of automotive components manufacturers, which the commission reports include “Denso Corporation, Maruyasu Industrial Company Limited, Hitachi Company Limited, Mitsubishi Electric Corporation, Tokai Rika Company Limited, NGK Spark Plug Company Limited, Mikuni Corporation, Aisin Industries Company Limited, Panasonic Corporation, Futuba Corporation and Fijistu-Ten Limited”.

The investigation apparently arises from information received by the commission that automotive components manufacturers colluded when bidding for tenders to supply automotive components to the listed OEMs.

Commission spokesperson Mava Scott tells Engineering News that five companies have come forward, providing detail on collusive behaviour to the commission.

“It is difficult to say how long it will take to complete the investigation. “We are busy examining the evidence and contacting the relevant people. It is going to take a lot of time.”

Scott notes that the commission is hopeful it will not have to prosecute all the perpetrators, but that the parties involved could rather “sit down and agree on a settlement”, as has been the case with the investigation into the construction industry.

According to the statement released by the commission, information in its possession suggests that from 2000 to date, 82 automotive components manufacturers had colluded in respect of 121 automotive components.

The 121 automotive components affected by the collusion include, but are not limited to, inverters, electric power steering engine control units, electric power steering and motors, glow plugs, rear sunshades, pressure regulators, pulsation dampers, purge control valves, accelerator pedal modules, power management controllers, evaporative fuel canister systems, knock sensors, spark plugs and clearance sonar systems.

“The commission will prioritise the investigation of cases that involve automotive components that are in vehicles assembled in and supplied to the South African market,” says competition commissioner Tembinkosi Bonakele.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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