Yazaki, Oz Subsidiary Accused of Cartel Activity

Parts supplier Australian Arrow and its Japanese parent Yazaki face a Jan. 10 court hearing on charges of running a cartel involving the supply of thousands of dollars’ worth of wire harnesses to Toyota Australia.

The Australian Competition and Consumer Commission filed a complaint in the Adelaide Registry of the Federal Court of Australia accusing the companies of engaging in cartel conduct, market sharing and price fixing.

Wire harnesses are electrical systems that facilitate the distribution of power and the sending of electrical signals to various components in a motor vehicle. Each vehicle is fitted with about A$2,000 ($2,111) worth of wire harnesses.

The ACCC alleges that between 2003 and at least late 2009, Yazaki and Australian Arrow made cartel arrangements with a competitor involving coordination of their responses to Toyota’s requests for quotations for the supply of wire harnesses to be used in Camry production.

In particular, the regulator claims Yazaki and a competitor arranged until at least late 2009 to meet in relation to requests for quotations received from auto makers, to agree on the allocation of wire harnesses to be supplied by each of them to the manufacturer, and to exchange and agree on the prices they would submit.

The ACCC also claims Australian Arrow and Yazaki maintained these agreements in relation to the supply of wire harnesses for ’06 and ’11 Toyota Camry models, and that Australian Arrow engaged in cartel conduct in relation to harnesses used in the ’02 Camry.

The ACCC action, seeking fines, declarations, injunctions and costs, follows similar enforcement action against Yazaki and other cartel participants by competition regulators in the U.S. and Japan involving the supply of wire harnesses and other components to a number of auto makers.

ACCC Chairman Rod Sims says the agency recently has focused on cartels, starting with a short film, “The Marker,” sent to the CEOs of Australia’s top 300 companies.

“This put the business community on notice that cartel activity would not be tolerated,” Sims says in a statement. “Cartel conduct is inherently anti-competitive and potentially impacts Australian consumers by ultimately raising the cost of products they purchase.”