China state TV accuses foreign carmakers of price gouging

Thu Dec 5, 2013 3:56am EST
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By Kazunori Takada and Samuel Shen

SHANGHAI (Reuters) - China's state television accused foreign carmakers of charging domestic customers more for repair costs than in other markets, singling out Audi, Subaru and Jaguar Land Rover Ltd in the latest of a series of programs targeting foreign firms.

The investigative report by China Central Television (CCTV), aired on Wednesday evening, also said that many of the foreign auto makers' dealers were reluctant to repair parts, often insisting on more expensive replacements.

The program said it was based on interviews with customers and workers at service workshops designated by foreign automakers.

It cited a tail door for a Land Rover model as being sold at around 24,100 yuan ($4,000) at an official service shop, compared with 8,500 yuan in the black market. It did not give a comparative price in other countries or specify what it meant by the black market.

"By setting ridiculously high prices, China has become the 'treasure bowl' for global carmakers," the report said, adding foreign auto makers were abusing their monopoly of sales channels.

It noted, however, that import and other duties were partly responsible for pushing up prices.

Responding to the CCTV report, Jaguar Land Rover, owned by India's Tata Motors Ltd, said its pricing was in line with Chinese regulations.

"As to the component maintenance cost with imported vehicles, JLR China has been strictly abiding by relevant laws and regulations in China, and has determined pricing with consideration of market conditions," Jaguar Land Rover (JLR) China said in a statement emailed to Reuters.   Continued...