Seoul: The antitrust regulator announced on Wednesday its decision to impose a combined fine of 2.59 billion won (US$1.75 million) on two local suppliers to Hyundai Motor Co. and Kia Corp. for colluding to manipulate bids.
According to Yonhap News Agency, SM Hwajin Co. and Cubic Korea Inc. prearranged winners and set bid prices in five tenders conducted between September 2020 and April 2023. These tenders were aimed at selecting contractors for the surface treatment of vehicle interior materials, as stated by the Fair Trade Commission (FTC).
The two companies were the sole registered bidders eligible for the tenders by the carmakers, which utilized the "hydrographic printing" method for interior surface treatment. The firms colluded in bids for five new vehicle models, including the Sportage, EV9, Santa Fe, EV3, and Palisade, with contracts awarded according to their agreement.
The FTC has imposed a fine of 1.63 billion won on SM Hwajin and 959 million won on Cubic Korea for violating the monopoly regulation and fair trade act. The bid rigging is suspected to have influenced production costs or retail prices of major sport utility vehicles (SUVs), though the FTC noted that it has not conducted an analysis to determine if the collusion directly resulted in higher consumer prices.
Last year, SM Hwajin reported approximately 18.5 billion won in sales, while Cubic Korea posted 227.2 billion won.