GM, Ford, Toyota and VW among automakers hit by antitrust penalties in India
MUMBAI (Bloomberg) -- India's antitrust regulator fined 14 carmakers a combined 25.4 billion rupees ($420 million) for stifling competition in the market for spare parts. Among the companies fined were the local units of General Motors, Ford Motor, Toyota, Volkswagen, Fiat, Nissan, BMW and Daimler's Mercedes-Benz.
The fines were equivalent to 2 percent of the carmakers' three-year average revenue in India, according to a Competition Commission of India order dated Aug. 25. The regulator also ordered the companies to provide spare parts and diagnostic tools to independent garages, and honor warranties on cars repaired by them after markups reached as high as 4,817 percent.
"The car companies charged arbitrary and high prices for their spare parts" through their monopolistic control, the commission said in a statement. Car companies were also found to be "distorting fair competition" by using their dominant position to protect their market for repair services, it said.
The commission found that carmakers were able to charge high prices by providing spare parts only to authorized repair shops. Fiat’s markup for components ranged from 19.9 percent to 4,817 percent, according to the commission.
The restrictions have limited the full potential of the independent repair shops "at the cost of the consumers, service providers and dealers," the commission said in the statement. The carmakers' behavior is "even more deplorable" considering they had committed to consumer-friendly practices in Europe, the regulator said.
Tata Motors drew the highest fine at 13.5 billion rupees, while Honda’s local unit was fined 784 million rupees, the most for a foreign brand. Other companies that were fined included Volkswagen Group’s Skoda, Hindustan Motors, Mahindra & Mahindra and Maruti Suzuki.
In a statement, Ford's India unit said it was reviewing the order and its implications, adding that the company had been working to enhance the availability of parts.
A Tata Motors spokeswoman also said the company would study the CCI order before making any comment. Mahindra & Mahindra said it planned to appeal the watchdog's order.
A Honda executive in India was not available for a comment, while a Maruti spokesman declined to comment. The India representatives of the other carmakers did not immediately respond to request for comment.
The Indian penalties come after a similar investigation by Chinese authorities. At least eight carmakers have recently lowered prices in response to a probe by China’s National Development and Reform Commission.
"Regulators are getting more aggressive in emerging markets, which is logically the right thing to do as the markets reach a certain threshold," said Deepesh Rathore, director at Emerging Markets Automotive Advisors in Delhi.
China’s NDRC last week found a dozen Japanese auto parts makers guilty of price fixing and levied the biggest antitrust fines since relevant rules went into effect six years ago.
Reuters contributed to this reportContact Automotive News