Channel NewsAsia

Indian anti-trust watchdog fines carmakers US$420m

India's anti-trust watchdog has fined 14 automakers a total of US$420 million (S$525 million) for restricting competition in the spare parts market and driving up prices, a official said on Tuesday (Aug 26), a few days after Chinese regulators took similar action.

NEW DELHI: India's anti-trust watchdog has fined 14 automakers a total of US$420 million (S$525 million) for restricting competition in the spare parts market and driving up prices, a official said on Tuesday (Aug 26), a few days after Chinese regulators took similar action. The Competition Commission of India found domestic automakers and local units of global vehicle manufacturers guilty of "anti-competitive conduct" by restricting the number of spare parts.

The commission said their actions had made parts costlier than necessary for some 20 million Indian consumers, with some markups as high as 4,800 per cent. Among the global companies fined were Toyota, Nissan, Honda, Volkswagen, BMW, Mercedes-Benz, Ford and General Motors. Local companies fined included Maruti Suzuki, Hindustan Motors and Tata Motors.

Last week, China fined 10 Japanese auto parts firms a total of more than US$201 million for price-fixing, reportedly the biggest-ever such penalties, as part of the country's anti-monopoly drive.

The Indian fines come as other market regulators increase their scrutiny and crack down on suspect practices amid public anger over what is seen to be widespread corruption. India's right-wing Prime Minister Narendra Modi came to power in May on a platform of wiping out corruption.

The competition commission opened its investigation two years ago after it was informed about a spare parts shortage in India, the world's sixth-largest auto market. "The 14 car companies were found to be indulging in practices resulting in denial of market access to independent repairers as the latter were not provided access to branded spare parts," the commission said in its order.

"The fines total 25.5 billion rupees (US$420 million)," said the commission official, who asked not to be named. The Indian fine levied on each automaker represents two per cent of the affected company's three-year revenue average and must be paid within 60 days.

"The parties are hereby directed to immediately cease and desist from indulging in conduct which has been found to be in contravention of the provisions of the Competition Act," the watchdog said in its 215-page order. The report contained statements by the carmakers that they "considered their service network adequate to handle all after-market service and spare parts of car owners".