Audi to accept punishment from China’s anti-monopoly commission

Article by Andrew Christian, on August 14, 2014

Audi will accept any punishment meted out by authorities for violating national anti-monopoly laws. Audi said in a statement e-mailed to Automotive News Europe that authorities found its dealer arm in the country -- FAW-Volkswagen Sales Co. -- to have breached anti-monopoly laws.

Audi’s statement came after China's National Development and Reform Commission (NDRC) disclosed that it had been probing into the auto industry in China for over two years. The NDRC had also launched similar investigations into other foreign companies in other industries like pharmaceuticals, technology and baby milk.

Volkswagen Group established up the FAW-VW joint venture to produce Audis and other models in China. According to Audi’s statement, it is now improving the management processes in the sales and dealership structure to prevent similar incidents from happening in the future.

The statement, however, did not explicitly say whether Audi acknowledged any wrongdoing. Audi said in the statement that the carmaker and its unit “attach great importance that all applicable antitrust and competition laws are adhered to.” The country’s renewed vigor in clamping down companies perceived to be engaged in monopolistic behaviors.

Such crackdowns, however, are threatening to end an era when some products like luxury cars generate more profits in China than in the United States or the United Kingdom. In July, the NDRC pressured at least seven carmakers to trim prices and even raided the offices of Microsoft Corp.

The investigations have foreign companies fending for themselves trying to interpret the laws and regulations in a country that has become less dependent on foreign investment. David Loevinger, former Treasury Department senior coordinator for China affairs, remarked that they could be a paradigm shift in China “where the rules of the game are changing." [source: automotive news - sub. required]

Topics: audi, china

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