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Mon, 30 March 2015 04:31:41
S Korean watchdog probes foreign car importers
20 Feb, 2012 11:30:19
SEOUL, Feb 20 (Asia Pulse) - Importers of high-end foreign cars face a fair trade investigation by the South Korean government, officials said Sunday, in an apparent response to growing consumer complaints over their sky-high prices and suspicions of price distortions.
Officials at the Fair Trading Commission and industry executives said that the watchdog has recently sent an official document to major foreign car importers, including Mercedes-Benz Korea, BMW Korea and Toyota Korea, informing them of its plan to conduct an inquiry over their price and distribution policies and sales practices.

The upcoming investigation comes after consumers complained that local price cuts by European automakers, in particular, have been insignificant even after the implementation of a free trade agreement between South Korea and the European Union.

A ranking executive at an importer that sells German high-end brands confirmed by telephone with Yonhap News Agency that the investigation has been set off by the FTC.

The investigation will go as far as covering from customer services and price adequacy of auto parts to ownership structures of the importers, the FTC officials said.

The importers under investigation are those that buy the most popular premium foreign labels, such as Mercedes, Audi and Lexus, from the head company overseas and sell them in the Korean market.

The FTC's move came as luxury foreign cars, mostly imported from Europe, have seldom seen a markdown in their prices even after the free trade pact between Korea and the European Union took effect last July.

Unreasonably high prices of auto parts are another reason for the launch of the investigation due to suspicion of price rigging, the FTC said.

According to a survey conducted by the Korea Insurance Development Institute last year, prices of auto parts for foreign vehicles were 6.3 times more expensive than domestic models on average.

The FTC is scheduled to finish the written investigation by Feb. 20 and proceed with an on-site probe by visiting the firms and dealers. (Yonhap)

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