BMW AG is also trimming the prices of spare parts in China as an anti-monopoly probe shocks the auto industry in the country. BMW joins fellow German luxury carmakers Mercedes-Benz and Audi brand in doing so. The prices of over 2,000 components will be trimmed by an average of 20 percent starting Aug. 11, BMW said in an e-mailed statement to Bloomberg.
The carmaker said its authorized dealerships in the country will establish more outlets in large cities like Beijing and Shanghai that will sell original parts to independent workshops.
China is ramping up its current probe into how much foreign carmakers charge for vehicles and spare parts and into whether they are committing antitrust violations. The government commenced its scrutiny into monopoly practices in the auto industry at the end of 2011.
BMW said in the statement that the Price Supervision and Anti-Monopoly Bureau of the National Development and Reform Commission recently expressed “great concerns” over existing issues in the auto industry and after-sales service sector. It said that it has been “paying close attention” is cutting wholesale prices and promoting the flow of original parts.
BMW already trimmed the prices in the first seven months of 2014 of over 3,300 pieces of original parts by an average of 15 percent. Around 108 products had their prices trimmed by between 20 percent and 50 percent, according to BMW.
NDRC spokesman Li Pumin said that antitrust officials in Jiangsu have commence probes into Mercedes-Benz dealers in five cities including Suzhou and Wuxi, while its officials in Shanghai recently raided Mercedes-Benz’s office in the city.
He disclosed that China will hand out punishments to the Chrysler Group and Audi for engaging in monopolistic actions. Li said that the NDRC is conducting the probe to protect the competitive order of the auto industry as well as to safeguard consumer interests, Li said at this week’s briefing.
He said that the NDRC has wrapped up its probe into 12 Japanese companies and will soon disclosed the actions to be taken. [source: Bloomberg]