SEOUL -- Four German automakers and Toyota Motor Corp. have been raided by South Korea's Fair Trade Commission on suspicion of price fixing and collusion, the importers' association says.
The swoop hit BMW, Mercedes-Benz, Audi and Volkswagen just a month after the combined market share for non-Korean automakers topped 10 percent for the first time, following recent free-trade pacts.
Investigators from Korea's FTC visited the local offices of BMW, Mercedes, VW, Audi and Toyota, the top five import brands, in February said Yoon Dae-sung, executive director of the Korea Automobile Importers and Distributors Association.
The importer association was also raided, on Feb. 26 and 27. Regulators took away digital copies of documents, Yoon said.
Authorities were investigating the foreign brands for alleged price fixing of spare parts and aftermarket parts. They are also looking into whether the importers abuse their leverage over local dealers by unfairly raising prices, Yoon said.
Regulators also may be looking into whether the head offices are limiting dealer discounts and discriminating against external financing, a spokeswoman at one automaker said.
Spokespeople or executives from the five companies confirmed that they were being investigated by the KFTC. Yoon and officials from companies deny any wrongdoing.
Kang Seung-bin, a KFTC official, declined to confirm whether an investigation was underway. It is the commission's policy not to do so until after an investigation finishes, he said.
It was unclear how long the investigation would last.
Yoon said he was not sure whether the raids were a backlash against the recent surge of import sales in Korea's long-closed market. Sales got a boost from a free-trade agreement with the European Union, which took effect in 2011, and from a free-trade pact with the United States, that went action last year.
Imports accounted for less than 1 percent of the market in 2002, Yoon said. But last year, sales climbed 25 percent to a record 130,858 units to take 10 percent of the domestic market.
When asked if the investigation had political undertones, Yoon said, "I don't think the Korean government has that intention. But import car sales are rising, so we are worried about the impact on our customers."
Regulators conducted a similar raid in the past with no findings of misconduct, Yoon said. A VW spokeswoman confirmed similar investigations in years past with no action taken.
This time, regulators seemed to be looking into whether automakers were manipulating the price of cars through limiting the amount of discounting available to dealers, VW spokeswoman Bang Sil said. "Of course, we are not doing that," she said.
Automakers are also accused of giving better terms to customers who use in-house financing, instead of independent services.
Ute Wueest von Vellberg, a spokeswoman for Daimler AG's legal affairs division, described the KFTC visits as "dawn raids."
"Mercedes-Benz Korea is cooperating with the KFTC and has provided the information requested," she said.
Despite the FTA with the United States, German brands have gobbled up 74 percent of South Korea's import market.
Japanese cars are next, accounting for 18 percent, even though Japan and South Korea have no free-trade agreement.
Many of the Japan-brand cars are shipped to South Korea from the United States, including the Toyota Camry sedan. The Camry was Korea's second-best selling import car last year, behind the BMW 520d, and was named Korea Car of the Year in January.
Ford and Lincoln combined are the top-ranking American brand, coming in seventh behind Mini, with 5,126 in sales last year.
General Motors Co. doesn't crack the top 18 on the importers' list because most of the cars it sells in South Korea are built locally and don't count as imports. Including those sales, GM ranks No. 3 in total domestic sales behind Hyundai and Kia.