China finds Mercedes-Benz guilty of price manipulation

Car industry is the latest to come under the spotlight as Beijing intensifies antitrust investigations

PUBLISHED : Monday, 18 August, 2014, 11:18am
UPDATED : Tuesday, 19 August, 2014, 5:53pm

Mercedes-Benz has been found guilty of fixing prices for car parts and after-sales services, according to antitrust authorities in Jiangsu.

A Xinhua report said the province's price bureau found evidence of price manipulation in an investigation launched last month covering the German brand's car dealers in five cities and its Shanghai office.

"Mercedes-Benz is a typical case of vertical price-fixing - the use of its leading position to control the prices of spare parts, repair and maintenance services in downstream after-sales marks," Zhou Gao, head of Jiangsu's antitrust unit under the National Development and Reform Commission (NDRC), told Xinhua.

A spokesman for Daimler, which owns Mercedes, said the company was still assisting the authorities in their investigation. "We are unable to comment further on what is still an on-going matter," he said.

Last week the European Union Chamber of Commerce in China expressed concern over the series of antitrust investigations, saying Beijing was using strong-arm tactics and appeared to be unfairly targeting foreign firms. China rejected the allegations and said all companies, local and foreign, were being treated the same under the law.

The Xinhua report did not mention the penalty Mercedes-Benz might face.

The NDRC, China's top economic planner, said earlier this month that it would impose a penalty on Germany's Audi and America's Chrysler for price-fixing. It also said that it had completed probes into 12 Japanese companies for fixing the prices of car parts and bearings, and that penalties would be imposed against the companies involved.

Audi said last week it would accept the penalty even though the investigation was not officially concluded. Chrysler did not reply to inquiries by the Post.

"The investigations are unlikely to spread to local car firms because their profit margins are reasonable as competition is fierce," Wan Dong, an analyst with Capital Securities, said.

The NDRC's recent investigations have forced some foreign carmakers to slash the prices of car parts.