When a Japanese carmaker issued a tender for shock absorbers a few years ago for a model it planned to sell in Indonesia, two suppliers came back with bids that were “so obviously coordinated,” said an executive at the automaker.
One supplier put in a slightly lower bid for front shock absorbers than its rival and a slightly higher bid for rear shocks, while its rival did the opposite. The intent was clear, recalled the carmaker’s former parts procurement chief for Indonesia who is now back in Japan and didn’t want to be named because of the sensitivity of the issue: they were dividing the contracts between them.
A few weeks later, he came across the two rival suppliers’ chiefs playing golf together in Jakarta, and summoned them to his office for an explanation. The upshot: the automaker asked the parts suppliers to re-bid.