2016-7-12 10:58:47
On July 5th, the German Federal Cartel Office (hereinafter referred to as the "Anti Monopoly Investigation Agency") announced that it had searched six major automakers and suppliers to investigate whether these companies had price control issues in steel procurement. Assuming that this illegal price alliance is confirmed, the above-mentioned enterprises will face high fines from the European Union. The currently known investigated companies include BMW, Volkswagen, Daimler, Bosch, and ZF. BMW China has not received any relevant information, according to a reporter from First Financial. Bosch Group China related personnel said they received this news this morning.
Industry leaders such as BMW and Volkswagen were investigated
The so-called "cartel" refers to an alliance or organization formed by enterprises that produce or sell a similar commodity in order to monopolize the market and obtain high profits by entering into agreements on commodity prices, production, and sales. According to the US Anti trust Law, "cartels" are illegal organizations.
On June 23rd, the German antitrust investigation agency officially launched the above-mentioned investigation. Among the potential price alliance companies, 50 management members have accepted our investigation, and the police have also provided support for this matter. A spokesperson for the German antitrust agency said that a detailed list of investigators and companies will not be disclosed at this time. However, at present, some companies have admitted to being investigated, such as Volkswagen, BMW, Bosch, ZF and other automotive giants, as well as large automotive suppliers.
A spokesperson for Volkswagen stated, "We confirm that representatives of the antitrust investigation agency have searched Wolfsburg (Volkswagen headquarters) and Volkswagen supports its investigation." Spokespersons for Daimler, Bosch, and ZF also confirmed that they are participating in the investigation and seeking cooperation with the authorities.
The German antitrust investigation agency suspects that these companies were involved in colluding with manufacturers and fixing steel prices between 1997 and 2011. After the Volkswagen "emission gate" scandal, these companies were also accused of agreeing to "regularly increase prices to introduce new emission technologies". Due to the difficulty of evidence being discovered externally, antitrust investigation agencies are also encouraging companies to provide relevant evidence through internal reporting. If they can proactively disclose it, the corresponding companies can be lenient and reduce fines.
Automotive parts as the focus of investigation
An important component of automotive accessories is steel. The body of modern cars is welded together with steel plates of different strengths. In the same vehicle, steel plates with different strength levels are used in different locations under different stress environments, and some locations with higher stress but cannot use thick steel plates use the highest strength steel plate. Vehicle steel plates are becoming thinner and thinner, and the strength and corrosion resistance of the steel are also constantly improving. In addition, many steel companies actively cooperate with automotive companies to develop lightweight and high-strength steel that can compete with aluminum alloy, plastic, and carbon fiber composite materials in response to the impact of new materials. Due to the fact that the major customers of automotive steel plates are automobile manufacturers, it is easy for both parties to combine prices vertically and horizontally.
On the other hand, a car is assembled from over 20000 spare parts, and the entire vehicle factory and spare parts manufacturers, as upstream and downstream, collaborate with each other in the production chain. Component procurement also plays a crucial role in automotive supply chain management. Automotive industry analyst Jia Xinguang once stated that component procurement accounts for about 70% of the total vehicle cost. So in addition to the possibility that automobile manufacturers may be suspected of manipulating steel prices, the behavior of automobile component manufacturers forming alliances to maintain a high price and then reporting it to car manufacturers is also a fact.
Since 2012, the European Union has been conducting antitrust investigations against automotive component manufacturers. The European Union initially conducted investigations into manufacturers of wiring harnesses, passenger safety systems, and bearings. Later, it launched a surprise investigation into automotive component manufacturers that produce thermal energy systems. It also conducted antitrust investigations against component giants such as Bosch and Schaeffler. The EU's antitrust investigations against automotive component manufacturers have become increasingly strong and large-scale.
In July 2013, due to suspicion of forming a monopolistic alliance and manipulating product prices, the European Union's antitrust authorities imposed penalties on Japan's Yazaki, Germany's Lenny, and the European subsidiaries of Japan's Yazaki, S-Y Systems Technology Co., Ltd. and Kogawa Electric Company's automotive parts suppliers.
In January of this year, the European Commission also imposed a fine of 138 million euros on cartel agreements between three automobile parts manufacturers, including Mitsubishi, Hitachi, and Electric Equipment Company (a subsidiary of the Toyota Group). The reason is that from September 2004 to February 2010, these three Japanese automotive parts manufacturers communicated multiple times in their respective office locations, restaurants, or over the phone to coordinate product prices, allocate customers, and reach project agreements on two products, including car generators and starters, in order to avoid competition. Among them, the electric installation company was exempted from punishment for first reporting the existence of the cartel agreement to the European Commission. EU Competition Commission Commissioner Margaret stated that cracking down on cartel agreements is one of the top tasks of the European Commission. Even if the agreement behavior occurs outside the European Union, the European Commission will investigate and punish it as long as it has an impact on consumers within the Union.
The higher anti monopoly penalties in the history of the European Union directly target major truck manufacturers in Europe. The reason is that these companies are suspected of manipulating prices and delaying the introduction of new emission technologies. The Financial Times reported that in 2014, Margaret released a preliminary draft of charges against DAF Trucks, Daimler, Iveco, SCAnia, MAN Trucks, and Volvo/Renault. Four companies have now set aside up to $2.6 billion in reserves for this. One of the previous EU record high fines was 1.4 billion euros (1.8 billion US dollars), which was imposed in 2012 due to monopolistic behavior by manufacturers of television and computer display tubes. Any price collusion among truck manufacturers will increase the prices of many goods, from food to furniture, "Margaret said to the public.