South Korea’s Fair Trade Commission (FTC), which has been investigating importers of foreign-made cars for setting prices excessively high, is now expanding the probe into allegations of price-fixing and other unfair business activities, according to a local newspaper.
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The Korea Times said the crackdown could finally bring to an end the controversy over the high prices of imported vehicles in the country, as the commission carries out an extensive on-site investigation.
Industry sources on Thursday told the paper that officials of the antitrust regulator made a rare visit on Wednesday to the Korea Automobile Importers & Distributors Association (KAIDA) and local operations of four major car companies ? Mercedes-Benz, BMW, Lexus and Audi ? to check their computers files and documents.
One of the sources told the Korea Times that the FTC officials copied documents including contracts with dealers and even examined private documents such as e-mail and the diaries of employees.
An official indicated that the FTC may check whether some of KAIDA’s 13 members have colluded to fix prices in response to SK Networks’ recent announcement of so-called ‘parallel’ or ‘grey’ import products.
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By GlobalDataThe paper noted that SK Networks, an affiliate of SK Group, announced last month that it would sell five foreign car brands below the prevailing market prices at its new imports-only outlets amid the controversy over the high prices of foreign-made cars imported through official dealerships.
In particular, the FTC is focusing its probe on whether official importers coerced dealers to maintain current prices in response to SK Networks, which vowed to cut the prices of foreign-made cars by more than 10% through parallel imports, the paper said.
Since the start of the year, the FTC has already been investigating allegations that BMW, Mercedes-Benz, Audi and other importers abused their dominant position in the market to keep prices of their automobiles higher than those in other countries, the Korea Times added.
The paper said some importers are known to sell a luxury sedan there at more than twice the price of the same model in the United States.
Imported cars now account for about 5% of the country’s total car market.
