India regulator fines carmakers $420 mln for anti-competitive practices

Hindustan Motors

26/08/2014 09:46

By Aditi Shah 
    NEW DELHI, Aug 26 (Reuters) - India's pricing regulator has 
fined more than a dozen global and local carmakers a total of 
25.5 billion rupees ($420 million) after a probe found they had 
engaged in anti-competitive practices in the world's sixth 
largest auto market. 
    The Indian penalty follows heightened regulatory scrutiny of 
the auto industry in China, the world's largest auto market. 
Several global car and spare parts makers have been fined, or 
are being investigated, by China's anti-monopoly regulator, the 
National Development and Reform Commission.  ID:nL4N0QR1HU  
    The Competition Commission of India (CCI) said in a 
statement it had fined the 14 automakers after its investigation 
showed they were restricting access to spare parts, which in 
turn made them more expensive for consumers. 
    It listed the automakers fined as the local unit of Honda 
Motor Co  7267.T , Toyota Motor Co  7203.T , Volkswagen AG 
 VOWG_p.DE  and its unit Skoda Auto, BMW AG  BMWG.DE , Daimler 
AG's Mercedes-Benz  DAIGn.DE , Fiat SpA  FIA.MI , Ford Motor Co 
 F.N , General Motors Co  GM.N  and Nissan Motor Co  7201.T . 
    Local carmaker Tata Motors Ltd  TAMO.NS  was handed the 
highest penalty of 13.46 billion rupees. The other Indian 
carmakers fined were Maruti Suzuki Ltd  MRTI.NS , Hindustan 
Motors Ltd  HMTR.NS  and Mahindra & Mahindra Ltd  MAHM.NS .     
    The fine, equivalent to two percent of the carmakers' 
three-year average India revenue, is payable within 60 days, the 
regulator said. 
    "The anti-competitive conduct... has restricted the 
expansion of spare parts and independent repairers segment of 
the economy to its full potential, at the cost of the consumers, 
service providers and dealers," it said in the statement. 
    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 CCI said it had launched its investigation in 2011 after 
receiving information that spare parts made by some companies in 
India were not freely available in the market, resulting in 
higher prices for the parts and repair and maintenance services. 
    It said it had asked the carmakers to rectify their 
anti-competitive behaviour, which it said impacted 20 million 
customers.  
    ($1 = 60.5100 Indian rupee) 
 
 (Editing by Sumeet Chatterjee and Miral Fahmy) 
 ((aditi.shah@thomsonreuters.com; +91-11 4178 1031; Reuters 
Messaging: aditi.shah.thomsonreuters.com@reuters.net; twitter: 
@aditishahsays)) 
 
Keywords: INDIA ANTITRUST/AUTOS