Unfair Car Trades
The Fair Trade Commission (FTC) is investigating allegations of unfair trading by Mercedes-Benz, BMW and Audi which are big 3 import car brands in Korea. It is noteworthy that this investigation will be an opportunity to break old practice in the imported car market.
According to industry sources on November 28, the FTC Seoul Office conducted on-spot investigation into Mercedes-Benz Korea from November 8 to 11, BMW Korea from November 15 to 18, and Audi Volkswagen Korea on November 22 to 25. FTC investigators visited each company's headquarters and conducted intensive investigations.
The FTC Seoul office is concentrating on circumstantial evidence in which Korean corporations of makers of import cars abused their dominant positions while doing business with dealers. The office is looking into whether or not they allocated vehicle sales to dealers, forced dealers to invest in service centers and exhibition halls and use their financial affiliates and restricted dealers from selling multiple brands at the same time. “First of all, we are investigating the three German automakers only and (depending on situations) our investigation may extend to all import car companies in Korea,” said an official of the FTC.
The import car industry is paying attention to the fact that the FTC said that it will improve the distorted structure of the import car market. Unlike investigations into individual cases such as the distortion of vehicle parts prices or the refusal of refunds of individual consumption tax, the import car industry is regarding it as an opportunity to rectify the overall order of the import car market in Korea. “The import car industry seem to begin to make a diagnosis about the structure of the imported car market in Korea where mega dealers selling multiple brands at the same time can hardly survive,” said Lee Hang-gu, a senior research fellow at the Korea Institute for Industrial Economics and Trade