Ford of Brazil Under Investigation

10/15/96

Reuters has reported that Brazil's Justice Ministry has announced that it is investigating allegations that Ford's Brazilian unit set "abusive prices" on car parts and forced distributors to buy a certain number of specific models. Ford do Brasil, the fourth largest carmaker in Brazil, declined to comment on the investigation.

Brazil's Justice Ministry stated that it had launched the probe on behalf of distributors, who have also accused Ford do Brazil of blocking competition among dealers. Distributors claim Ford requires them to buy specific amounts of cars and car parts, charges "abusive prices" for parts, and undercuts them by selling cars directly from the factory.

The Justice Ministry will submit a report of its investigation to Brazil's antitrust commission (CADE), which will judge the matter. If CADE rules against Ford, the carmaker will have to pay a fine and end the practices, said the Justice Ministry.

Ford sold 131,818 vehicles during the first nine months of 1996 in Brazil.

Paul Dever -- The Auto Channel