China revs up antitrust investigation of foreign auto makers

Source:Globaltimes.cn Published: 2014/8/7 21:18:46

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Foreign auto giants to be punished: NDRC
China's top economic planner announced Wednesday it will punish two foreign auto giants for monopolistic practices, and added it expects 12 Japanese companies to also be punished for breaking the anti-monopoly law.

Antitrust investigation expands to foreign automobile giants
German automobile giant Daimler AG's subsidiary luxury brand Mercedes-Benz confirmed on August 5 it is cooperating with China's anti-monopoly watchdog over an investigation, after its Shanghai office was reportedly "raided" on August 4.

              Antitrust Details

NDRC statements:

*Chrysler and Audi were found to have engaged in monopolistic behaviors and will be punished accordingly in the near future.

*A separate antitrust investigation into 12 Japanese companies has been completed, and they will be punished in accordance with the law for monopoly pricing of auto components and bearings.

*Jiangsu Province Price Bureau separately launched an antitrust probe into Daimler AG's Mercedes-Benz dealers in five Jiangsu cities, and the authorities are now collecting evidence.

Company reactions:

*Several Japanese auto manufacturers, including Toyota, Honda and Nissan, said they did not investigated by NDRC.

*Foreign Auto giants began to reduce the prices of their products since July:

2014/08/05Chrysler reduced the price of its top of the line Jeep Grand Cherokee SRT8 model by 65,000 yuan ($10,500) and its Grand Cherokee 5.7-liter Summit by 45,000 yuan. It will also cut by 20 percent the price of 145 spare parts, including headlights, mirrors and starters.
2014/08/03Mercedes-Benz announced that it will slash prices for some spare parts by up to 29 percent from September 1. The reductions will involve over 10,000 parts, with a 15-percent price cut on average.
2014/07/26The ratio of the total market price of all of the Audi A6L's components to the entire vehicle's price will be set at 291 percent, down from 411 percent, an Audi statement said.
2014/07/25Land Rover reduced the price of its three models by 200,000 yuan in average.
2014/07/01Mercedes-Benz said it will cut the prices of its spare parts and service charges by 20 percent in China.

Related laws:

According to the Anti-Monopoly Law of China, enterprises which have been involved in monopolistic practices may be fined between 1 and 10 percent of their total sales from the previous year.

            Auto Monopoly in China


China car probes mark anti-monopoly war - Xinhua
Anti-monopoly lawyer Hao Junbo said the Anti-Monopoly Law has been "dormant" since it came into force, but it will be better practiced in the future.

Liu Chunyan, an associate professor of law with Tongji University, believes this is just a beginning and the probes may extend to other sectors as it has taken some time for supervisors to get up to speed with how to enforce the anti-monopoly laws.

Carmakers take hint on parts costs - Reuters
China's competition watchdog has forced luxury carmakers into a U-turn. The whiff of a probe into vehicle parts was enough to get Audi and Jaguar Land Rover to reduce their prices, even though neither has been publicly deemed to be abusing its position. Experience shows in China it is better to admit guilt early than risk bigger fines, or lose access to a critical market.

More luxury auto brands to cut prices - The Beijing Times
An increasing number of luxury car brands will reduce prices in order to be in line with the Chinese government’s anti-monopoly investigation, said Jia Xinguang, an auto industry expert.

Regulation of after-sales service a must for Chinese auto market - Chinanews.com.cn
Europe has previously banned this form of after-sales service. Now that China has become the largest auto market in the world, regulation of after-sales service is more urgent than ever before. 

Web editor: yangruoyu@globaltimes.com.cn

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