The Korea Fair Trade Commission (KFTC) has launched an investigation into the pricing practices of several foreign car makers. In mid-December the competition agency raided the Korean import offices of Mercedes Benz AG, BMW AG, Toyota Motor Corp.’s Lexus division and Volkswagen AG’s Audi division, as well as the Korea Automobile Imports & Distributors Association. According to a KFTC spokesperson, the car makers are being investigated for possible anticompetitive conduct that resulted in inflated prices in Korea as compared with other countries. Specifically, the agency is investigating possible coordination among the car makers to interfere with so-called “gray market” imports. The “gray market” refers to legal imports into a territory that are not conducted or sanctioned by the manufacturer (a form of transshipping). Where there are significant price disparities between territories, distributors or dealers often engage in arbitrage between the territories.
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KFTC investigates foreign luxury car makers
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