Airbag maker Takata in hot water with SA’s competition watchdogs
The South African unit of bankrupt Japanese airbag maker Takata will be prosecuted by the Competition Tribunal.
The Competition Commission said on Wednesday morning that it was referring Takata to the tribunal for four separate cases involving price fixing, market division and collusive tendering.
The decision follows an investigation in which the commission found Takata was involved in "price fixing, market division and collusive tendering" for components fitted to BMW X3, Honda Civic and CR-V and Toyota Yaris vehicles sold in SA.
Takata continues to be embroiled in a global recall of more than 80-million vehicles fitted with its faulty airbags.
The commission said on Wednesday it found that Takata and US competitor Autoliv had colluded in supplying seatbelts for two models of Honda cars. None of the components or vehicles was manufactured in SA but Sipho Ngwema, the commission’s head of communications, said the commission had jurisdiction over competition transgressions that had an effect in SA even if the offences happened outside the country.
"Takata and Autoliv discussed both tenders and agreed to co-ordinate prices and bids. This was to ensure that Takata would win the seatbelts, airbags and steering wheels tender for the Honda Legend, while Autoliv, in turn, would win the contract to supply seatbelts for the Honda CRV motor vehicles," the commission said in a statement on Wednesday.
The commission found that Takata and Autoliv had similarly colluded for a contract in 2008 to supply Toyota Yaris seatbelts.
"During the tender process, Takata and Autoliv disclosed their prices to each other so that Autoliv would submit a higher price in order to enable Takata to win the tender. Autoliv submitted a price higher than Takata, in line with the arrangement, so that Takata could retain the tender to supply Toyota with front seatbelts," the commission said.
TRW Automotive and TRW Occupant Restraints SA are also named as co-offenders, but Ngwema said the company applied for leniency after it "spilled the beans and co-operated with the investigation".
There are four individual cases, three of which are related to a R150m fine Takata’s US competitor, Autoliv, received from the tribunal in October.
The first case involves a tender issued by BMW in 2007 for airbags and seat belts in the F25 generation X3.
The second case involves a 2007 tender for seat belts in the Honda Civic, where Takata and Autoliv "agreed to fix prices, divide markets and tender collusively in contravention of section 4(1)(b) of the Competition Act", said the commission.
In the third case, Honda issued a tender in 2008 for its Legend model, a car that was never sold in SA.
However, the commission’s investigation had found that Takata and Autoliv agreed that Takata would supply certain components for the Legend and allow Autoliv to win a contract to supply components for the Honda CR-V.
The final case was also in 2008, when Toyota issued a tender to supply seat belts for its Yaris model.
Mzo Witbooi, manager of corporate public relations at Toyota SA, told Business Day that "the Yaris is not manufactured in South Africa and, as such, TSAM imports the vehicle fully built up with no say in the sourcing of any components.
"We would, however, like to state that it is a component supplier, not Toyota South Africa, that is implicated by the Competition Commission."
If found guilty, Takata could face a fine of up to 10% of its turnover in the year preceding that to which the transgression applies. This means the commission could levy the fine against the company’s 2006 or 2007 annual turnover.
However, in 2017 Takata filed for Chapter 11 bankruptcy protection in the US and the majority of its assets are being sold to Key Safety Systems (KSS), an American company specialising in vehicle-safety components, for $1.588bn.
The offences all occurred in 2007 and 2008 when Takata, along with its co-offenders, colluded on tenders to supply various vehicle components including airbags, seat belts and steering wheels.
In 2017, Autoliv SA, a subsidiary of the global Autoliv company, admitted guilt in colluding with Takata and others and paid a R150m fine.
With Robert Laing