Japanese car parts makers hit by fines

Two Japanese automotive bearing manufacturers, NSK Ltd and NTN Corp, said on Tuesday they have been fined by a Chinese government regulator for violating the country's Anti-Monopoly Law, after a raft of foreign automakers announced price cuts in response to the government's antitrust probe.

China's National Development and Reform Commission (NDRC), the country's top economic planner and antitrust watchdog, has ordered NSK to pay a fine of 174.92 million yuan ($28.48 million) for violating China's Anti-Monopoly Law regarding selling bearings in the country, the company said on Tuesday.

NSK said it had been fully cooperating with the NDRC's investigation, which ended on August 6, and it will take measures to "ensure strict compliance with all applicable laws and regulations," the company said.

Neither the NDRC or NSK specified how the firm had violated the law.

NTN Corp, another Japanese bearing maker, said it was fined 119.2 million yuan by the NDRC, Reuters reported on Tuesday.

The NDRC said on August 6 it had finished a price monopoly investigation into 12 Japanese auto parts makers and would issue a punishment based on law.

Japanese companies own a significant share of China's auto parts market, especially for key parts such as bearings, Zeng Zhiling, a senior analyst at consultancy LMC Automotive, told the Global Times on Tuesday.

Auto parts makers and carmakers usually fix the prices of car components which are needed to replace existing parts in malfunctioning vehicles, resulting in unreasonably high fees for after-sales services, Beijing-based Economic Information newspaper reported on Monday.

Automakers usually require exclusive original parts supply from auto parts makers and forbid them from selling the same parts on the market, in a bid to control the repair and maintenance market, according to Zeng.

In addition to auto parts, the government is also carrying out an anti-monopoly investigation on major automakers, many of which have lowered the prices of their replacement components in response to the probe.

The joint venture of China's Guangzhou Automobile Group Co Ltd and Japan's Honda Motor Co Ltd announced on August 8 that it would cut the price of some replacement parts from September 1.

Germany automaker Daimler AG also announced on August 3 that its premium car brand Mercedes-Benz would cut the prices of some auto parts by an average of 15 percent from September 1.

Audi's Chinese joint venture also reduced parts prices from August 1 by as much as 38 percent, media reports said.

Although most of the price reduction applies to rarely changed parts, it is still a positive change for Chinese customers, Jia Xinguang, a Beijing-based auto analyst, told the Global Times on Tuesday.

In the global market, the average ratio of replacing all parts compared to the price of a new vehicle could reach up to 300 percent, media reports said.

However, the ratio in the Chinese market can be higher than 400 percent or even close to 1,000 percent, media reports said.

The anti-monopoly investigation is being conducted to ensure a fair market rather than being directed solely at foreign automakers, so it should be a lasting effort rather than a short-term probe, Su Hui, a senior expert at the China Automobile Dealers Association, told the Global Times on Tuesday.

Whether a company is cooperative during a probe and whether it makes prompt changes after faulty issues are found will impact the size of the fines issued by the regulator, Zhao Zhanling, a legal counsel with the Internet Society of China, told the Global Times on Tuesday.

The fine can range anywhere from 1 to 10 percent of a firm's revenue from the previous year.