South Korea’s Korea Fair Trade Commission (KFTC) has imposed fines and corrective orders on two companies for colluding in bids for vehicle interior surface treatment contracts issued by Hyundai Motor Company and Kia Corporation.
The regulator said the companies — SM Hwajin and Hankook Cubic — agreed in advance on winning bidders and bid prices in tenders held between September 2020 and April 2023.
Collusion in interior parts tenders
The collusion related to five tenders for surface treatment of vehicle interior components such as dashboards, centre consoles, door trims and steering wheels. The contracts involved processing techniques designed to improve durability, functionality and visual appearance.
According to the KFTC, the two companies coordinated their bids in tenders for interior parts used in new models including the Sportage, EV9, Santa Fe, EV3 and Palisade.
Under the agreement, SM Hwajin was designated to win four contracts covering the Sportage, EV9, Santa Fe and EV3 models, while Hankook Cubic was set to win the Palisade contract. The tenders ultimately resulted in the agreed winners securing the contracts.
Market dominated by two suppliers
The regulator noted that the two companies together held 100% of the market for hydrographic printing surface treatment used by Hyundai and Kia, making their coordination particularly harmful to competition.
The collusion began after SM Hwajin recovered from financial difficulties and sought to regain orders from Hyundai and Kia. Meanwhile, Hankook Cubic feared that renewed price competition could reduce profitability, leading the companies to agree to avoid bidding aggressively against each other.
Fines and corrective orders
The KFTC imposed fines totalling 2.59 billion won (about €1.8 million) and issued cease-and-desist orders to prevent further violations.
SM Hwajin was fined approximately 1.63 billion won, while Hankook Cubic was fined around 959 million won.
Focus on intermediate goods cartels
The authority said the case highlights enforcement against collusion in intermediate goods and component markets, which can have significant ripple effects across industrial supply chains.
The KFTC added that it will continue to strengthen monitoring of cartel behaviour in upstream and component sectors that can undermine industrial competitiveness.
