Hyundai, Mahindra Reva and Premier in contravention of the Competition Law in India

The order issued by CCI to Hyundai on Monday was calculated on basis of 2% of Hyundai Motor India’s average turnover. Hyundai is expected to comply with the order and deposit the fine within 60 days from receipt of the same.

competition commission of india
It is the duty of CCI to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.

While penalties were levied on Hyundai Motor India, CCI had also previously found Mahindra Reva Electric Car Company and Premier to have violated provisions in the Act. The two companies were later absolved of making this payment as mitigating factors worked in their favor.

CCI found that the three auto companies flouted provision under Section 4 of the Act. The companies were dominant in aftermarkets for their respective brands resulting in denial of market access. Supply of genuine spares and diagnostic tools were being held back by the company to independent repairers thus distorting fair competition.

Hyundai Creta Launch
Hyundai India President, Mr B S Seo at the launch of Creta SUV last week in Delhi

Penalties levied on Hyundai Motors India follows penalties to the tune of INR 2,544.64 crores imposed on 14 other automakers in August 2014 for similar reasons. These companies included Honda Siel, Fiat, Volkswagen, BMW, Ford, General Motors, Hindustan Motors, M&M, Maruti Suzuki, Mercedes-Benz, Nissan Motors, Skoda, Tata Motors and Toyota Kirloskar Motor.

Mahindra Reva with ZooZoo
Mahindra Reva flagship car, the e20 was launched in Hyderabad yesterday.

These companies followed a policy whereby they restricted supply of genuine spares requiring customers to get their vehicles serviced or repaired only through authorized service networks or rendering warranty invalid.

Official Notice from CCI