Hyundai Motor and Kia Motors have been ordered to stop the practice of cutting payments to subcontractors without justifiable grounds, the Korea Times reported.
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According to the Fair Trade Commission, Hyundai Motor “saved” 347.5 million won by pushing parts suppliers to reduce prices by 0.2-21.4” between February and December last year, the paper said.
The commission said subcontractors were forced to accept price reductions because the assembler, namely Hyundai Motor, demanded the discount.
Kia Motors also slashed payments to its six subcontractors unilaterally by 0.3-53%, reducing costs by 180.9 million won, the Korea Times said.
After the forcible discount became an issue, Hyundai and Kia returned the sum, including interest, to components suppliers.
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By GlobalDataBut the fair trade body said the misconduct of the nation’s largest vehicle groups must be made public to prevent Hyundai and Kia from repeating their actions, the Korea Times said.
