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China fines Japanese auto parts firms $200 mn for monopoly
by Staff Writers
Shanghai (AFP) Aug 20, 2014


Volvo Car reports return to profit on China sales
Stockholm (AFP) Aug 20, 2014 - Chinese-owned Volvo Car Group announced a return to profits on Wednesday in an upbeat half-yearly report that cited "solid" demand for the Swedish brand particularly in China.

The Gothenburg-based manufacturer bucked dismal sales trends in the global auto industry with a 15-percent hike in turnover to 64.78 billion kronor ($9.39 billion, 7.06 billion euros).

Net profits was 535 million kronor in the first six months of the year compared to a 778 million kronor loss for the same period in 2013.

Sales in vehicle terms grew by 9.5 percent year on year to 229,013 units, compared to 209,117 for the same period in the previous year.

"This first half result is both solid and encouraging," chief executive Haakan Samuelsson said in a statement.

The group doubled its previous sales outlook for the year to 10 percent, partly due to strong demand from China where sales grew by 34.4 percent, largely offsetting a 10 percent fall in US sales.

"We are growing our presence in China and we expect to sell at least 80,000 cars there this year," said Samuelsson, just a week ahead of the formal launch of the XC90 SUV -- Volvo's first fully new car since being bought by Zhejiang Geely Holding from Ford Motor Company in 2010.

Apart from banking in the growth of the Chinese car market where the group has three factories, it also said a "revival plan" was underway with new management in the US, where the Swedish brand has no manufacturing base.

In Europe, Volvo said the market showed "signs of recovery and growth", with particularly good results in the UK, Germany and the Netherlands.

Nonetheless, the group's operating profit is expected to stagnate in 2014 "due in part to an expected negative impact from exchange rates and the continued investment program".

Volvo Cars was separated from the Volvo Group's truck, engine and construction machinery business in 1999 and employs 22,300 globally.

China has fined 10 Japanese auto parts firms more than $200 million in total for price-fixing, authorities said Wednesday, reportedly the biggest-ever such penalties, in the latest step of the country's anti-monopoly drive.

Beijing has over the past year launched a wide-ranging crackdown on alleged malpractice by foreign firms across diverse sectors, including pharmaceuticals, baby formula and technology, raising fears overseas companies are being targeted.

The auto parts companies were found to have implemented monopoly pricing agreements for more than 10 years, the National Development and Reform Commission (NDRC) regulator said in a statement.

It fined them a total of 1.24 billion yuan ($201 million), in what state broadcaster CCTV said was the biggest fine China had imposed since its anti-monopoly law took effect in 2008.

"The companies... unlawfully affected prices of auto parts, finished vehicles and bearings in China and harmed the interests of downstream manufacturers and consumers," the NDRC statement said.

Sumitomo Electric was fined the most -- 290.4 million yuan -- of the seven car parts firms penalised for fixing auto parts prices between January 2000 and February 2010, according to the statement, the others being Denso, Aisan, Mitsubishi Electric, Mitsuba, Yazaki and Furukawa Electric.

NSK, JTEKT and NTN were fined for price collusion over bearings between 2000 and June 2011, the NDRC added, with NSK ordered to pay 174.9 million yuan.

Two other companies, Hitachi Auto Parts and Nachi, which makes roller bearings, were found culpable but exempted from the penalties for taking the initiative to inform authorities and providing evidence on the monopoly agreements.

- Multiple investigations -

The NDRC, one of several Chinese government bodies that investigates monopoly actions, said in early August it was probing auto firms including Audi and Chrysler as well as the 12 Japanese companies for possible violations.

It is the latest in a series of inquiries in various fields which have raised investor concerns about the business climate in China.

State media have reported that more than 1,000 companies in the country's auto sector, both domestic and foreign, are currently involved in anti-monopoly probes by the government.

In late July authorities raided offices of Microsoft and investigated the US software giant for allegedly operating a monopoly in the Chinese market.

State media have also said China is planning to announce that US chip maker Qualcomm has monopoly status in the mobile phone chip industry.

Police in May accused a top executive of British drugmaker GlaxoSmithKline of ordering employees to commit bribery in China, and handed the case over to prosecutors after a nearly one-year probe.

Last year the government fined six baby formula producers -- all but one of them foreign -- a total of $108 million for price-fixing.

Chinese officials have denied that overseas firms are being targeted in the investigations, but foreign direct investment (FDI) into the country fell to a two-year low last month.

Five of the Japanese auto companies -- Mitsubishi, Denso, Sumitomo, NSK and JTEKT -- issued statements confirming the penalties and pledging compliance with Chinese law and regulations.

Mitsubishi Electric said it "takes this matter very seriously" and "will comply with the order".

Denso said it was its policy "to comply with all applicable antimonopoly laws".

Both NSK and JTEKT said they took the situation with "utmost seriousness" while Sumitomo said its "highest priority" was to comply with competition laws.

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