Import car brands wary of FTC probe

Antitrust watchdog poised to dispatch inspectors to offices


Six import car brands in Korea are paying close attention to the antitrust regulator’s ongoing investigation into foreign carmakers on suspicion of price-fixing and irregular practices with dealerships.

According to the Fair Trade Commission, the brands under investigation are BMW, Mercedes-Benz, Volkswagen, Audi, Toyota Motor and Lexus.

Mercedes-Benz Korea recently enhanced its public relations in a move to prevent misinformation from being spread to consumers, company spokespeople said Tuesday.

To counter groundless allegations, the company is also actively tendering detailed documents to the FTC under the guidance of its Germany-based headquarters.

But company officials clarified that they are very cautious about commenting on anything concerned with the probe, stressing that “the inspection is underway.”

A spokesperson for BMW Group Korea said the company’s position “is to sincerely respond to the probe by submitting related documents as allegations surface in the market.”

Volkswagen-Audi is similarly on close watch for the antitrust regulator’s next move.

“With a coordinative attitude toward the probe, our stance is merely to wait (until the result is made public),” a company spokesperson said.

The FTC also instructed local dealers and distributors of Toyota and its premium brand Lexus to tender documents, which includes vehicle price tags.

The regulator, which has already completed a paper-based preliminary investigation, is considering dispatching a group of investigators to the six import car brands’ Korean offices and dealerships in the third quarter.

During the first quarter of this year, the FTC launched an investigation into local importers and distributors of overseas-brand cars for allegedly unfair business practices such as over-pricing.

The investigation focused on the pricing policy and distribution system of import cars amid consumers complaints about high prices, especially those of European vehicles, even under the Korea-EU Free Trade Agreement, which took effect a year ago.

In contrast to expectations for moderate price cuts, most local importers have raised or maintained vehicle prices in recent months.

Mercedes-Benz Korea raised the prices of some models by an average of 0.5 percent early this year, while BMW Korea set the new 528i sedan at 67.9 million won ($59,100), up 0.7 percent from the previous model.

High repair costs will also be inspected, as they are believed to have driven up car prices overall.

The probe also includes possible unfair business practices between importers and dealers.

“As the import car industry is rapidly expanding, it will continue to be under intensified watch by tax authorities as well as antitrust authorities,” an FTC official said.

Korea saw yearly sales of import cars surpass 100,000 units in 2011 for the first time. Their 2011 sales came to 105,037 units, up 16 percent from 90,562 units a year before.

This year, the Korea Automobile Importers & Distributors Association forecasts the 25 import brands together will grab 10 percent of the nation’s automobile market in terms of yearly sales for the first time in history.

The import car industry saw its vehicle sales reach an all-time high during the first half of the year, posting a monthly sales average of more than 10,373 units.

Their sales came to 62,239 units in the first half, up 20.5 percent over the same period last year, the association said.

By Kim Yon-se (kys@heraldcorp.com)