26 August 2014

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Competition Commission fines 14 car makers Rs2, 554 crore List car company name with fine

Competition Commission fines 14 car makers Rs2, 554 crore List car company name with fine

The Competition Commission of India (CCI) Monday levied a penalty of Rs.2, 544.65 crore on 14 car manufacturers for violating the competition law.

A complaint was filed by Shamsher Kataria, who had complained to CCI that car makers were following anti-competitive practices by restricting the sale of spare parts.
Kataria had filed the complaint in January 2011 against Honda Cars India Ltd, Volkswagen India and Fiat India Automobiles Ltd

In April 2011, CCI extended its probe to other manufacturers when it found others following similar practices.

The commission had investigated 17 companies in the case.
The three that were not immediately fined are:
1-Premier Ltd,
2-Mahindra Reva Electric Car Co.
3-Hyundai Motor India Ltd.

The commission however said that a separate order shall be passed with respect to them “after affording them reasonable opportunity to make their submissions in respect of the findings.”

The Competition Commission of India (CCI) said in a statement on Monday that
Car companies denied access to branded spare parts and diagnostic tools to independent repairers, hampering their ability to repair and maintain certain car models
The monopolistic control over the spare parts and diagnostic tools markets allowed these companies to charge arbitrary and high prices
The commission found that the conduct of the car companies was in violation of the provisions of section 3(4) of the Act with respect to its agreements with local original equipment suppliers (OESs) and agreements with authorized dealers whereby it imposed absolute restrictive covenants and completely foreclosed the after-market for supply of spare parts and other diagnostic tools

Following are the names of car makers who are fined by CCI with fine amount

1-Tata Motors was fined Rs.1, 346.46 crore, the highest

2-Maruti Suzuki at Rs.471.14 crore

3-Mahindra and Mahindra at Rs.292.25 crore

4-Toyota Kirloskar Motors will have to pay Rs.93.38 crore

5-General Motors Rs.84.58 crore

6-Honda Rs.78.47 crore

7-Skoda Auto India Rs.46.39 crore

8-Ford India Rs.39.78 crore

9-Fiat India Automobiles Ltd Rs.29.98 crore

10-Mercedes-Benz- Rs.23.08 crore

11-BMW India Ltd Rs.20.41 crore

12-Hindustan Motors Rs.13.85 crore

13-Volkswagen India Pvt. Ltd Rs.3.25 crore

14-Nissan Motors Rs.1.63 crore.

The CCI directed the companies to immediately cease and desist from indulging in conduct which has been found to be in contravention of the provisions of the Competition Act.

CCI also directed the car companies to put in place an effective system to make the spare parts and diagnostic tools easily available through an efficient network.

The car companies are also directed not to impose blanket condition that warranties would be cancelled if the consumer avails of services of any independent repairer.

The car makers are also directed to make available in public domain information regarding the spare parts, the retail price, arrangements for availability over the counter, and details of matching quality alternatives, maintenance costs, provisions regarding warranty including those mentioned above, and any such other information which may be relevant for full exercise of consumer choice and facilitate fair competition in the market.

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Tuesday, August 26, 2014

Tags – CCI Fine India Car Companies 14 names