SEOUL—South Korea's antitrust regulator has begun a probe into allegations that Hyundai Motor Group forced its auto parts suppliers to lower product prices, a person familiar with the matter said Thursday.
The Fair Trade Commission this week visited the offices of Hyundai Motor Co., Kia Motors Corp. and Hyundai Mobis Co. after sending the companies, all members of the Hyundai Motor Group, notice of the probe, the person said.
It wasn't clear which auto parts and which suppliers are involved. Hyundai Motor Group, the world's fifth-largest car maker by sales, declined to comment.
Hyundai Motor and Kia Motors usually have price-setting negotiations with around 2,000 subcontractors twice a year. Given their size, Hyundai and other South Korean conglomerates have enormous leverage in setting prices during negotiations with their subcontractors.
Last month, a Seoul court upheld a decision in 2006 by the Fair Trade Commission to fine Hyundai Motor about 1.6 trillion won ($1.48 billion) for forcing its parts suppliers to reduce component prices.
The antitrust watchdog's latest move comes as the government is expected to place more emphasis on supporting small and midsize companies, many of which continue to experience tough times even as the nation's conglomerates power the country out of the 2007-2008 global financial crisis.
With South Korea recovering quickly from the crisis, President Lee Myung-bak, whose five-year single term ends in early 2013, has urged South Korea's conglomerates to try to share the "warmth of the economic recovery" with their smaller peers and prosper together with them.
Mr. Lee's ruling Grand National Party fared poorly in April's parliamentary by-elections, which were perceived as a midterm evaluation of the government's performance ahead of next year's general election in April and presidential election in December.
The Fair Trade Commission this week visited the offices of Hyundai Motor Co., Kia Motors Corp. and Hyundai Mobis Co. after sending the companies, all members of the Hyundai Motor Group, notice of the probe, the person said.
It wasn't clear which auto parts and which suppliers are involved. Hyundai Motor Group, the world's fifth-largest car maker by sales, declined to comment.
Hyundai Motor and Kia Motors usually have price-setting negotiations with around 2,000 subcontractors twice a year. Given their size, Hyundai and other South Korean conglomerates have enormous leverage in setting prices during negotiations with their subcontractors.
Last month, a Seoul court upheld a decision in 2006 by the Fair Trade Commission to fine Hyundai Motor about 1.6 trillion won ($1.48 billion) for forcing its parts suppliers to reduce component prices.
The antitrust watchdog's latest move comes as the government is expected to place more emphasis on supporting small and midsize companies, many of which continue to experience tough times even as the nation's conglomerates power the country out of the 2007-2008 global financial crisis.
With South Korea recovering quickly from the crisis, President Lee Myung-bak, whose five-year single term ends in early 2013, has urged South Korea's conglomerates to try to share the "warmth of the economic recovery" with their smaller peers and prosper together with them.
Mr. Lee's ruling Grand National Party fared poorly in April's parliamentary by-elections, which were perceived as a midterm evaluation of the government's performance ahead of next year's general election in April and presidential election in December.
