China says to punish Audi, Chrysler for monopoly behavior

Wed Aug 6, 2014 6:30am EDT
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SHANGHAI/BEIJING (Reuters) - China's antitrust regulator said on Wednesday it would punish Audi and Chrysler for monopoly practices, potentially paving the way for the automakers to be fined up to 10 percent of their domestic annual sales revenue in the world's biggest car market.

Chrysler is owned by Fiat SpA FIA.MI while Volkswagen (VOWG_p.DE: Quote) owns Audi, and both are premium brands in China. The regulator, the National Development and Reform Commission (NDRC), said an ongoing investigation into the two companies showed they had "conducted anti-competitive behaviors".

"They will be punished accordingly in the near future," NDRC spokesman Li Pumin told a press conference in Beijing.

Audi and other global automakers have recently rushed to change their pricing strategies in China in response to the government investigation into the auto industry, and amid domestic media complaints that foreign carmakers were overcharging Chinese customers on vehicles and spare parts.

The NDRC also said it was launching a probe into Mercedes-Benz, owned by Daimler AG (DAIGn.DE: Quote), and that it had finished investigating a dozen Japanese spare-part manufacturers on similar anti-trust charges. The regulator did not name the companies or give further details.

"The purpose is to maintain a sound competitive order in the auto market and protect consumer interest," said NDRC spokesman Li.

The China-based spokesperson for Chrysler declined to comment. Both Audi China and Mercedes-Benz said they were cooperating with the NDRC.

Audi says China, including Hong Kong, accounts for a third of its global sales by volume. Chrysler's market share was not immediately available.

The NDRC did not specify the punishment for Chrysler or Audi. Under the six-year-old anti-monopoly law, the NDRC can impose fines of between 1 and 10 percent of a company's revenues for the previous year.   Continued...

The national flag of China flutters behind a fence of the headquarters of the National Development and Reform Commission (NDRC) in Beijing, in this picture taken July 12, 2013.  REUTERS/Kim Kyung-Hoon