Seoul, April 22 (IANS) The antitrust regulator here said on Wednesday it has decided to fine two local suppliers to Hyundai Motor and Kia, a combined 2.59 billion won ($1.75 million) for colluding to rig bids.

SM Hwajin and Cubic Korea prearranged winners and bid prices in five tenders conducted between September 2020 and April 2023 to select contractors for surface treatment of vehicle interior materials, according to the Fair Trade Commission (FTC).

The two companies were the only registered bidders eligible for tenders by the two carmakers using the “hydrographic printing” method for interior surface treatment, reports Yonhap news agency.

The firms colluded in bids for five new vehicle models, including the Sportage, EV9, Santa Fe, EV3 and Palisade, with contracts awarded as agreed between them.

The FTC imposed a fine of 1.63 billion won on SM Hwajin and 959 million won on Cubic Korea for their violation of the monopoly regulation and fair trade act.

The bid rigging is suspected to have affected production costs or retail prices of major sport utility vehicles (SUVs), though the FTC said it has not conducted an analysis on whether the collusion directly led to higher consumer prices.

Last year, SM Hwajin reported around 18.5 billion won in sales, while Cubic Korea posted 227.2 billion won.

Meanwhile, Hyundai Motor and Kia are expected to report lackluster first-quarter earnings compared with last year due to the effects of US tariffs and a weaker Korean won, a market analysis showed.

According to the analysis of earnings forecasts from securities firms compiled by Yonhap Infomax over the past three months, Hyundai Motor is estimated to report sales of 45.89 trillion won ($30.4 billion) on average for the January-March period and an operating profit of 2.78 trillion won in its earnings report expected to be released on Thursday.

The projected sales figure represents a 3.3 percent increase, while operating profit marks a 23.3 percent decline.

Its sister Kia is estimated to report 29.62 trillion won in sales and 2.32 trillion won in operating profit, which would mark a 5.7 percent on-year growth and a 22.6 percent decline, respectively, on Friday.

—IANS

na/