Chrysler, Audi and 10 spare parts suppliers to be punished in China

Article by Christian A., on August 9, 2014

China will impose punishments to 12 companies – two carmakers and 10 spare parts companies – for violating the country's anti-monopoly law. According to China’s National Development and Reform Commission (NDRC), it had found Chrysler in Shanghai and Audi in Hubei to be engaging in monopolistic behavior.

NDRC has also finished its probes into 12 Japanese auto-parts makers and will impose punishment to companies found to be violating the law, commission spokesman Li Pumin said. Under China’s anti-monopoly law, the NDRC can impose fines ranging between one percent and 10 percent of a company's revenues for the previous year.

According to Colin Liu, a lawyer in the auto industry, the amount of fines set by NDRC typically depends on how cooperative the companies under investigation are. Industry experts quipped that the carmaker have too much leverage over car dealers and auto part suppliers, which have allowed them to control prices – a move regarded as a violation of the country’s anti-trust laws.

Yale Zhang, managing director of consultancy Automotive Foresight (Shanghai) Co. Ltd., said that monopolistic behavior is “quite rampant” in the auto industry and NDRC is first targeting imported luxury brands since the problem is most severe in this sector.

He added that such punishments would serve as a warning signal to the auto industry. Zhang remarked imported luxury cars in China have prices that are on average two-and-a-half to three times higher than their prices in the United States.

The carmakers, however, claim that the difference in prices is due to higher import duties and other taxes. State media have criticized foreign carmaker for selling imported cars at higher prices than in other markets and overcharging for spare parts.

Antitrust officials have also commenced probes into Mercedes-Benz dealers in five cities. Officials also recently raided the carmaker’s office in Shanghai. [source: Reuters]

Topics: chrysler, audi, china

If you liked the article, share on:

Comments

Recommended

When the Crown De Luxe saloon was first released in 1972, it was at that time the most lavish Toyota model available to British customers. Both unusual and exclusive, one...
by - February 27, 2017
The ride-sharing fleet of sharing Lyft Inc. will soon include thousands of specially fitted self-driving Chevrolet Bolt electric vehicles, courtesy of General Motors. If plans push through, Lyft’s clients would...
by - February 27, 2017
J.D. Power has officially released the 2017 Vehicle Dependability Study, an annual list of the most dependable brands in the auto industry. Once again coming on top is Lexus, the...
by - February 26, 2017
Citroen revealed that its entry to the Chinese market is moving forward with the planned release of the new generation C5. While still on sale on this part of the...
by - February 26, 2017
There is definitely a second-generation Super Series from McLaren. Even in camouflaged form, it is simply incredible. But while we still don’t have the full data on how truly dynamic...
by - February 25, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries