Business

BMW Japan raided by FTC over allegations it set unfair sales quotas: sources

JIJI, Kyodo

Japan’s Fair Trade Commission raided BMW Japan Corp. on Wednesday for allegedly imposing unreasonable sales quotas on its distributors and making them buy vehicles when they missed the targets.

A representative of BMW Japan confirmed that the FTC raid had taken place, and commented that the company would cooperate with the investigation.

According to sources, the antitrust watchdog suspects that the Tokyo-based unit of German automaker BMW AG began imposing unfair trade conditions on distributors several years ago, such as setting sales targets for new models that appear to have been difficult to achieve through normal sales activities.

BMW Japan made the distributors buy vehicles when they failed to meet quotas, abusing its superior bargaining position in violation of the anti-monopoly law, the sources said.

The alleged unfair practice was apparently induced by fierce competition from Mercedes-Benz and other rivals in the imported vehicle market.

Distributors registered BMW vehicles they purchased under their names and sold them in the used car market afterward, according to the sources.