The South African motor industry denied on Thursday it had colluded to fix prices after The Competition Commission said it had found evidence of possible widespread violations and launched a probe.

Reuters said the commission slapped a R12 million ($US1.75 million) fine on the local unit of Toyota late on Wednesday for forcing dealers to sell at minimum prices and launched a wider investigation into suspicions that others were also guilty.

But The National Association of Automobile Manufacturers of South Africa (Naamsa) reportedly shot back, saying carmakers and importers have never held talks to set prices.

“At industry level, we do not and have not ever engaged in discussions on trading practices or pricing issues, those are the responsibility of individual companies,” Naamsa Director Nico Varmeulen said, according to the report.

The industry group would make a formal response to the commission next week and cooperate fully with the probe, he reportedly added.

Reuters said the commission said it had found evidence to suggest that it was a standard practice among the industry to impose a minimum resale price on dealers, limiting their ability to offer discounts.

“Information in our possession also indicates possible collusion amongst dealers as well as price coordination by manufacturers and we are determined to uncover these practices and eradicate them if we prove their existence,” a statement reportedly said.

Reuters noted that Toyota South Africa acknowledged it had set minimum discounts for a new Corolla model in late 2002, but said it had discontinued the practice and had cooperated with the commission.

Toyota reportedly said it had limited discounts to protect its dealer network since dealer profits on the new models were lower.

The news agency said consumers have complained that South African car importers have not passed on the effects of a strong rand by lowering prices, but the industry argues that it has kept prices stable so that the prices of second-hand cars do not slide.

The rand surged by 28% last year, Reuters noted.

Earlier this week, Naasmsa reportedly said new car sales for the 12 months to April rose 13% year-on-year to 28,667 units.

Members of Naamsa include BMW South Africa, Daimler Chrysler SA, Ford Motor Company of Southern Africa, General Motors South Africa, Nissan South Africa and Volkswagen of South Africa, Reuters said.