China probes 12 Japanese car parts makers for antitrust violations

12 firms could face financial penalties while Audi and Chrysler broke the rules against monopolies

PUBLISHED : Thursday, 07 August, 2014, 4:34am
UPDATED : Thursday, 07 August, 2014, 9:05am

China's top economic planning agency has completed antitrust investigations of 12 Japanese makers of car parts and confirmed that German luxury brand Audi and US carmaker Chrysler had been found to have engaged in monopolistic behaviour.

Li Pumin, secretary general of the National Development and Reform Commission (NDRC), said yesterday the probes into the Japanese firms were to determine whether they had violated rules against monopolies in setting prices for parts and bearings.

The investigations were recently completed, and penalties would be imposed on those firms that broke the rules as the law allows, Li said.

Japanese carmaker Nissan and its luxury brand Infiniti said they didn't receive any investigation requests, and Honda didn't comment.

A company that has been found to have engaged in illegal pricing could face a fine equivalent to between 1 per cent and 10 per cent of its revenue in China during the previous year.

Li also confirmed media reports that Audi and Chrysler had indulged in monopolistic practices in setting prices for vehicle maintenance and spare parts.

The NDRC's Shanghai bureau had almost completed the antitrust probe of Chrysler, he said, and the investigation of Audi was conducted by the antimonopoly unit of Hubei province's price bureau.

"The two companies will soon face penalties accordingly," he said, without providing details.

Li also said that last week the antimonopoly unit of Jiangsu province's price bureau investigated German luxury brand BMW's car dealers in five cities, including Suzhou and Wuxi .

Harry Chen, an automotive analyst with Guotai Junan Securities, said the antitrust probes would continue to put additional pressure on foreign companies to cut prices for cars and auto parts and help establish a fairer market in the country.

The NDRC's recent investigations have already led to Chrysler cutting the prices of two models by between 45,000 yuan and 65,000 yuan (HK$57,000 and HK$82,000) while the cost of some spare parts was slashed by 20 per cent.

The finance ministry, tax bureau and Ministry of Industry and Information Technology said yesterday that the 10 per cent purchase tax on new-energy cars would be exempted from next month until 2017.