TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Honda, Yamaha to challenge cartel verdict over scooter price

Indonesia’s motorcycle manufacturing giants PT Yamaha Indonesia Motor Manufacturing (YIMM) and PT Astra Honda Motor (AHM) will challenge a verdict by the Business Competition Supervisory Commission (KPPU) that says they are guilty of price-fixing

Prima Wirayani (The Jakarta Post)
Jakarta
Wed, February 22, 2017

Share This Article

Change Size

Honda, Yamaha to challenge cartel verdict over scooter price

I

ndonesia’s motorcycle manufacturing giants PT Yamaha Indonesia Motor Manufacturing (YIMM) and PT Astra Honda Motor (AHM) will challenge a verdict by the Business Competition Supervisory Commission (KPPU) that says they are guilty of price-fixing.

The KPPU announced on Monday that YIMM and AHM had engaged in a cartel practice in the sales of automatic scooters of 110 cc and 125 cc by marking up the vehicles’ prices. Such a practice violates Article 5 of Anti-Monopoly Law No. 5/1999, which prohibits businesspeople from conspiring with competitors to control prices in a particular market.

A violation against the rule can result in a maximum penalty of Rp 25 billion (US$1.9 million) or five months’ imprisonment as a penalty substitution. The commission sentenced YIMM and AHM with a penalty totaling Rp 25 billion and Rp 22.5 billion, respectively.

The commission panel led by Tresna Priyana Soemardi punished YIMM a higher amount due to its alleged lack of cooperation during the hearings. The panel was of the view that the firm presented false and fabricated data indicating there was no mark up of the vehicles’ prices.

“Toward this decision, we, PT Yamaha Indonesia Motor Manufacturing, express our deep disappointment with the commission’s decision, which disregarded the facts of the hearing, where the witnesses that were examined during the hearing stated that there was no evidence of communication in any form whatsoever between Yamaha Indonesia and Honda,” YIMM public relations general manager M. Abidin wrote in an official statement.

YIMM and AHM have 14 days from the verdict ruling to submit their objections with the court.

According to an official statement by the commission, the panel, in order to support its verdict, referred to an alleged meeting of the companies’ high-ranking officials at a golf course, an alleged email dated April 28, 2014, and another alleged email dated Jan. 10, 2015.

The latter email was allegedly sent by YIMM marketing director Yutaka Terada using his office email address to AHM vice president director Dyonisius Beti.

“Considering the capacity of the email’s sender and recipient and the media used, which was the firm’s official email address, the commission panel does not ignore the facts as evidence,” KPPU’s statement reads.

In a previous letter sent to The Jakarta Post in September last year, AHM corporate communications deputy head Ahmad Muhibbudin denied that such exchanges took place, either personally or on behalf of his firm.

The KPPU claimed previously that the prices of both firms’ automatic scooters surged exponentially in the first half of 2016 to reach more than Rp 15 million per unit. Its calculation shows that the prices should have stood at Rp 12.6 million only, considering that production costs hovered around Rp 7.5 million and 8 million per unit.

AHM corporate secretary and legal general manager Andi Hartanto also said his firm would challenge the decision. “This verdict has yet to be legally binding and is open for us to get truth and justice through the next litigation process,” he said after the Monday hearing as quoted by Kontan.

Separately, Indonesian Motorcycle Industry Association (AISI) chairman Gunadi Sindhuwinata expressed concern that the verdict would set a bad precedent for the industry. “Investors will be uncertain about investing in Indonesia,” he said by phone on Tuesday, questioning the panel’s decision, which was allegedly made based on out-of-context evidence.

According to AISI data, AHM controlled around 60 percent of the country’s motorcycle sales last year, while YIMM held around 20 percent of it. Last year’s motorcycle sales reached approximately 6.25 million units.

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.