The Fair Trade Commission, investigating allegations that electric bus manufacturers and importers provided rebates to transportation companies, conducted on-site inspections of Hyundai Motor and KG Mobility's bus manufacturer, KGMC. The commission is examining the entire process of electric bus supply from companies importing Chinese electric buses to mid-sized and large domestic manufacturers.
According to the automobile industry on the 22nd, the Fair Trade Commission's key investigation team sent investigators to the Gangnam KG Tower, where Hyundai Motor, Kia, and KGMC offices are located, on the 12th to secure related documents. Last month, the Fair Trade Commission conducted on-site inspections of domestic mid-sized electric bus manufacturers Woojin and Beomhan Automotive, and in March, of GS Global and PLINE MOTORS, which import and sell Chinese electric buses.
This investigation aims to confirm whether there were any unfair customer solicitation practices under the Fair Trade Act throughout the electric bus supply chain. Domestic manufacturers and Chinese importers should compete based on quality and price, but the core of the allegations is that they engaged in backdoor transactions, such as gift certificates or parts support. The Fair Trade Act prohibits unfair customer solicitation. Unfair customer solicitation refers to actions that entice a competitor's customers to engage in transactions with a business through excessive profit offerings or hindering contract establishment.
The Fair Trade Commission is reported to be focusing on cases where monetary benefits were provided or government subsidy policies were misused during the electric bus supply process. It has been noted that Chinese bus importers allegedly required transportation companies to purchase their buses while providing unrelated benefits such as gift certificates or cash, and domestic manufacturers reportedly presented conditions related to electric buses, such as support for charging station installation or tire replacement. There are also reports that some transportation companies overtly requested benefits.
In the industry, the excessive promotional activities of Chinese electric bus importers have been controversial. The government has announced a policy to reduce subsidies for electric buses equipped with Chinese lithium iron phosphate (LFP) batteries by up to 60%. In response, as domestic electric buses gained market share, Chinese importers launched competitive promotional activities.
Regarding this investigation, Hyundai Motor stated, "We cannot confirm." A KGMC official noted, "We will cooperate sincerely with the Fair Trade Commission's investigation."