Auto parts price-fixing is everywhere, crackdown threatens business model
Automaker execs speaking to Reuters say that price-fixing isn't new and that, while Japanese companies have been taking huge public hits, "that's not the exception, but the typical business condition we deal with routinely around the world." In Singapore, such collusion among parts makers was so structured and refined that they collectively called it the Market Share and Profit Protection Initiative. And wherever it's been practiced, it's worked – the Reuters report notes that parts suppliers not only keep prices high for the manufacturers, they then charge up to ten times more for replacement parts - the exact same parts - for dealer service centers and repair shops. That's given some suppliers better profit margins than the automakers they supply.
What everyone is waiting to see is whether the investigations and fines will lead the suppliers to change their business models, swapping conspiracy for "low cost and high quality" via leaner production processes.
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