The antitrust regulator in Seoul announced fines totaling 2.59 billion won for two local suppliers to Hyundai Motor and Kia. SM Hwajin and Cubic Korea colluded in rigging bids for surface treatment contracts for vehicle interior materials. The Fair Trade Commission revealed that the collusion involved prearranging winners and bid prices in five tenders between September 2020 and April 2023.
The two suppliers were the sole bidders eligible for tenders by Hyundai and Kia using the “hydrographic printing” method. The bid rigging encompassed contracts for five new vehicle models, including the Sportage, EV9, Santa Fe, EV3, and Palisade. SM Hwajin received a fine of 1.63 billion won, while Cubic Korea was fined 959 million won for violating monopoly regulations and fair trade laws.
The collusion is suspected to have impacted production costs or retail prices of SUVs, although the Fair Trade Commission has not confirmed a direct link to consumer prices. SM Hwajin reported sales of around 18.5 billion won last year, while Cubic Korea posted 227.2 billion won in sales. Hyundai Motor and Kia are anticipated to report subdued first-quarter earnings due to US tariffs and currency fluctuations.
