Thu, Aug 07, 2014 - Page 15 News List

China alleges Chrysler, Audi monopoly

‘PUNISHED ACCORDINGLY’:In the results of a two-year probe into the sector, the NDRC said the firms ‘showed monopoly behavior’ in the world’s biggest auto market


China stepped up pressure on foreign automakers in the world’s biggest auto market on Wednesday, pledging to punish German luxury brand Audi AG and the US’ Chrysler Group LLC for “monopoly behavior.”

China’s National Development and Reform Commission (NDRC), which polices violations of the Chinese anti-monopoly law, has been investigating the sector — dominated by foreign companies and their joint ventures — for more than two years but had not mentioned any particular firms.

Audi is the luxury car unit of Volkswagen AG, Europe’s biggest automaker, while Chrysler has merged with Italy’s Fiat spA.

“It has been found out that the two companies showed monopoly behavior and they will be punished accordingly in the near future,” NDRC spokesman Li Pumin (李樸民) told a news conference in Beijing.

A spokesman for Fiat-Chrysler in China declined to comment, while Audi could not be reached.

The NDRC announcement came two days after anti-monopoly investigators from the agency raided a Shanghai office of Mercedes-Benz, a luxury unit of Germany’s Daimler AG, by grilling employees and inspecting computers.

Li confirmed the investigation into Mercedes-Benz, according to a transcript of the news conference posted online. Daimler said on Tuesday that it was “assisting” the inquiry.

China is critically important for foreign automakers with total sales of 21.98 million vehicles last year.

Regulators believe prices for both parts and vehicles are unfairly high in the country, but manufacturers say authorities impose heavy duties on imported cars and parts, which ramp up costs for domestic consumers.

Li did not clarify what was meant by “monopoly behavior,” but China considers using a dominant market position to set prices as a form of monopoly.

Violators’ “illegal gains” can be confiscated, and they can also be fined up to 10 percent of their sales revenue for the previous year.

Another 12 Japanese automakers were under investigation for monopoly pricing of vehicle components and bearings, Li said, but declined to name them, adding that details would be released later.

Auto companies have rushed to cut prices in recent weeks in an apparent bid to appease Beijing.

On Sunday, Daimler announced it would slash prices of more than 10,000 spare parts for its Mercedes-Benz cars in China from Sept. 1, according to a statement that linked the move to investigations of the entire auto industry in China.

Audi lowered its prices for spare parts last week, it said in a statement, while Chrysler said on Tuesday it would slash prices for both parts and some of its Jeep models, Dow Jones Newswires reported.

The NDRC spokesman said the anti-monopoly investigations started at the end of 2011, but analysts say China has recently escalated them.

Last week, China’s State Administration for Industry and Commerce said it was investigating US software company Microsoft Corp for allegedly operating a monopoly after raiding four of its offices around the country. The administration, which also enforces the anti-monopoly law, said that the inquiry centers on Microsoft’s Windows operating system — which is used on the vast majority of computers in China — and the Office suite of programs.

Chinese media outlets have reported that Beijing is planning to announce US chip maker Qualcomm Inc has monopoly status in the cellphone chip market.

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