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Kayaba, Sumitomo to pay millions for price-fixing in US

Kayaba Industry Co, which does business in the US as suspension parts maker KYB, and Sumitomo Electric Industries are facing payments in the millions to settle price-fixing cases about the components that they make. As part of the Department of Justice's ongoing crackdown of price fixing in the auto industry, KYB agreed to pay $62 million and pleaded guilty to conspiracy to set the cost of shock absorbers from the mid '90s through 2012. The company allegedly worked with co-conspirators to keep the cost of the parts high, and those components then made it into vehicles from Honda, Kawasaki, Nissan, Subaru, Suzuki, and Toyota. "Any collusive agreement among competitors to restrict price competition undercuts our free enterprise system and violates the law," said Carter M. Stewart, US Attorney of the Southern District of Ohio, in the DoJ's announcement. Over the past few years, the DoJ has brought cases against 37 parts suppliers and 55 executives, leading to over $2.6 billion in fines. The investigations haven't always been so successful – some of the Japanese execs fled from the US to avoid prosecution. Critics allege that price fixing is simply how business is done. According to Automotive News, Sumitomo Electric Industries is also facing a $50 million settlement in a civil lawsuit that's related to price fixing of parts like wiring harnesses and heater control panels. The plaintiffs include owners and dealers that purchased vehicles with these parts. The company asserts that the violations are from before 2010, and it now has different process in place to avoid further violations. KYB Agrees to Plead Guilty and Pay $62 Million Criminal Fine for Fixing Price of Shock Absorbers Kayaba Industry Co. Ltd., dba KYB Corporation (KYB) has agreed to plead guilty and to pay a $62 million criminal fine for its role in a conspiracy to fix the price of shock absorbers installed in cars and motorcycles sold to U.S. consumers. According to charges filed today, KYB conspired from the mid-1990s until 2012 to fix the prices of shock absorbers sold to Fuji Heavy Industries Ltd. (manufacturer of Subaru vehicles), Honda Motor Co. Ltd., Kawasaki Heavy Industries Ltd., Nissan Motor Company Ltd., Suzuki Motor Corporation and Toyota Motor Company, including their subsidiaries in the United States.

VW targeting 10M sales in 2014

Volkswagen Group believes it can sell over 10 million vehicles in 2014, with hopes of overtaking Toyota as the world's largest automaker in the process. If VW can do it, it would meet that goal four years earlier than planned. Of course, Toyota isn't sitting still - it also hopes to top the 10 million-car threshold this year and has the advantage of already holding the top spot.
"With rising volume and new models, we will increasingly see positive earnings effects as well," said VW Group CEO Martin Winterkorn during its annual press conference, according to Automotive News. The company is spending huge amounts of money to propel it to the top, investing 84.2 billion euros ($117 billion) through 2018, and according to AN it plans to introduce over 100 new models worldwide among all of its brands by the end of next year.
The German automaker may get an extra boost as the European car industry shows signs of emerging from its yearlong stagnation and China continues to grow. In January, VW Group was up 8.5 percent in Europe and 15.5 percent in China, according to its own figures. However, the US has been slowing with Volkswagen brand sales down 19.04 percent in January and down 13.81 percent in February.

Legal approach in $1.2 billion Toyota settlement could impact handling of GM recall cases

In the past, if an automaker did something wrong, they were usually prosecuted by the US government through something called the TREAD Act. Short for Transportation Recall Enhancement, Accountability and Documentation Act, it basically requires automakers to report recalls in other countries, along with any and all serious injuries or deaths, to the National Highway Traffic Safety Administration.
Failing to report or attempting to conceal anything when there's been a death or serious injury constitutes a criminal liability. The idea is that this setup puts the onus on manufacturers to keep NHTSA apprised of safety related issues before they become a problem in the US, thereby allowing the regulator to better protect consumers.
In theory, it sounds like a relatively airtight set of rules for dealing with misbehaving automakers. That didn't stop the US Department of Justice from ignoring TREAD in its prosecution of Toyota's handling of the unintended acceleration recall, though. The result of this new approach, which charged Toyota with wire fraud, was a $1.2 billion settlement. Now, the wire-fraud approach could be used for the expected case between the US government and General Motors, based on the statements of Attorney General Eric Holder, who specifically mentioned "similarly situated companies" when discussing Toyota.