CCI slaps fine on 14 automakers, Tata & Mahindra to appeal

Competition Commission of India (CCI) has imposed a total penalty of INR 2,545 crores on as many as 14 auto companies in India for anti competitive practices on spare parts. Among these auto makers are Maruti Suzuki, Tata Motors, and Honda Cars India.

CCI slaps fine on 14 automakersVolkswagen India, Fiat India Automobiles, BMW India, Ford India, General Motors India, Hindustan Motors, Mahindra & Mahindra, Mercedes-Benz India, Nissan Motor India, Skoda Auto India and Toyota Kirloskar Motor are all a part of this order which CCI has levied with fines amounting to 2% of their average turnover.

The order consists of 215 pages and cites violation of trade norms in both spare parts and after sales service markets. The penalty is to be deposited within 60 days of receipt of this order while most auto makers will be challenging the order. Investigations have revealed that auto companies violated competition norms with respect to deals entered into with local Original Equipment Suppliers along with authorized dealers. The auto majors were charged with use of monopolistic controls over spares and denied market access to independent repairers where access to branded spare parts and diagnostic tools were concerned.

According to the order, Tata Motors (fined the highest) has to pay a fine of INR 1,346.46 crores while Maruti Suzuki has to shell out INR 471.14 crores followed by M&M with a fine of INR 292.25 crores and Toyota Kirloskar Motors having fine liability of INR 93.38 crores. The other automakers all have fines ranging from INR 84.58 crores to INR 1.63 crores.

It has now been revealed that Mahindra and Tata Motors are set to appeal against this order. Apart from them, others too are evaluating the situation and will also appeal against the order if need be.

via Economic Times