Volvo cannot escape mainland carmaker probe
Analysts say investigation into car price fixing will expand to many more foreign brands
Volvo's mainland backing may have spared it from the first round of anti-monopoly investigations in the car sector but analysts say the Geely-owned carmaker cannot avoid government enforcers for long.
Luxury foreign brands have been targeted first by the regulators because of the high premium they charge on the local market and the investigations would continue to widen to more foreign brands such as Volvo and other American brands, said Andreas Graef, a Shanghai-based principal at consultancy AT Kearney.
"Because of the Geely ownership, Volvo has an advantage as of now. But when the investigators look at more foreign premium brands and companies, they will likely look at Volvo too," said Graef.
Volvo told the South China Morning Post that it was not being investigated by the National Development and Reform Commission (NDRC) and other government agencies.
Citing an unnamed NDRC official, a China Daily report yesterday said anti-trust investigations had spread to more than 1,000 foreign and local car companies, including manufacturers, suppliers and dealers, as well as state and domestically owned firms.
The NDRC last week said Germany's Audi and Chrysler of the United States had engaged in monopoly practices and Germany's BMW was under investigation. It has also completed probes into 12 Japanese firms for fixing prices of car parts and bearings.