Business Competition Supervisory Commission (KPPU) is investigating Indonesian car producers for allegedly fixing prices and rigging distribution. (JG Photo/Dhana Kencana)

Anti-Monopoly Body Investigates Car, Motorcycle Price Fixing


JULY 29, 2015

Jakarta. Indonesia's anti-monopoly body is investigating allegations involving four of the country's car and motorcycle producers who are said to be working in a cartel-like scheme to control prices and distribution.

“Every month, chiefs of four producers gather at a tea party,” Syarkawi Rauf, chairman of the Business Competition Supervisory Commission (KPPU), said on Tuesday. “That is when they allegedly control the prices and sales [targets].”

Syarkawi declined to name any of the involved car producers, adding that “we are still investigating this, and now we are still clarifying the reports.”

The investigation came after the KPPU received reports that car producers barred dealers from being involved in a breakaway Indonesia International Motor Show (IIMS), an annual car show that was previously organized by a unit of Kompas Gramedia in conjunction with the Indonesian Automotive Industry Association (Gaikindo).

This year, Gaikindo has decided to run IIMS alone and has denied asking its member car producers to bar dealers from participating in the event.

The anti-monopoly commission is also looking into an alleged cartel practice between the country's two largest motorcycle manufacturers.

“[There have been indications that they have been] adjusting their prices with each other,” Syarkawi said. "That is under our investigation now."

While avoiding naming any of the motorcycle producers mentioned in the allegations, Syarkawi said the two producers account for more than 80 percent of the country's motorcycle sales.

Data obtained from Indonesian Motorcycles Industry Association (AISI) reveals that Astra Honda Motor, the local sole distributor of the Japanese manufacturer, leads the market with 2.13 million motorcycle sales, or 67 percent of total sales in the first half of this year. Yamaha Indonesia Motor Manufacturing holds 29 percent of the market, having sold 973,560 motorcycles in the period.

The two companies have yet to comment on the allegations.

Under 1999 anti-monopoly law, groups of companies that are found guilty of price fixing are liable to pay up to Rp 25 billion ($1.9 million) in fines.

Investor Daily