The car industry has to change business practices that leave the door open to corruption at a time of intense competitive pressure, the head of European automotive suppliers association CLEPA, Lars Holmqvist, told Reuters on Friday.
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CEO Holmqvist reportedly singled out “pay to play” – which requires suppliers to put up money in advance just to be considered for contracts with carmakers – as an insidious tool that must be abolished.
“Pay to play is a very bad and corrupting practice and should be stamped out, since this is an entrance to bribery and it is very difficult to check,” he wrote in reply to the news agency’s questions submitted by email.
“Since you do not get anything in return for your payment, it opens up all sorts of temptations for greedy and dishonest persons on both sides.”
Reuters noted that German prosecutors are investigating around 20 people on suspicion they paid or took bribes intended to influence purchasing managers at carmakers including Volkswagen, its Audi unit and BMW to award contracts to suppliers.
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By GlobalDataIn response to the probe, VW has said it won’t tolerate corruption, and BMW has said it has severed all links to suspects in the case, the report added.
Pierre Levi, chief executive of Faurecia, resigned this week after Frankfurt prosecutors named him as a target of the probe and alleged he had for years covered up bribes that his company paid, Reuters said.
Holmqvist reportedly stressed that most people in the business are honest and do not resort to bribery.
“I know that there are certain black sheep, and most of it is concentrated on very few persons in organisations that for various reasons have found it difficult to walk the line,” he told the news agency, adding: “Our new competitors sometimes have a different view on this topic and do not understand why we make such a fuss about it.”
