Competition Commission Imposes ₹2,545 Crore Penalty on 14 Carmakers


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Chennai: The Competition Commission of India (CCI) Monday levied a penalty of Rs 2,544.65 crore on 14 car manufacturers for violating the competition law.

The CCI's hefty penalty came after it found that these car makers have restrictive practices that prevent independent repairers coming into the market.

India's Tata Motors Ltd suffered the highest penalty of Rs 1,346.46 crore, followed by Maruti Suzuki (Rs 471.14 crore), Mahindra & Mahindra (Rs 292.25 crore) and General Motors (Rs 84.58 crore).

The other car companies that have been penalised are: Honda Siel, Volkswagen India, Fiat India, BMW India, Ford India, Hindustan Motors, Mercedes Benz, Nissan Motor, Skoda Auto India and Toyota Kirloskar India.

The CCI also directed the companies to immediately cease and desist from indulging in conduct which has been found to be in contravention of the provisions of the Competition Act.

It also directed the car companies to put in place an effective system to make the spare parts and diagnostic tools easily available through an efficient network.

The car makers are also directed to make available in public domain information regarding the spare parts, the retail price, arrangements for availability over the counter, and details of matching quality alternatives, maintenance costs, provisions regarding warranty including those mentioned above, and any such other information which may be relevant for full exercise of consumer choice and facilitate fair competition in the market.

The car companies are also directed not to impose blanket condition that warranties would be cancelled if the consumer avails of services of any independent repairer.

Competition Commission imposes Rs 2,545-crore penalty on 14 car makers
 
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Re: Competition Commission imposes Rs 2,545-crore penalty on 14 car makers

The auto companies wont care about such fines as they are just peanuts compared to their profits.
 
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Re: Competition Commission Imposes Rs.2,545 Crore Penalty on 14 Carmakers

^^ The mentioned amount is not peanuts i guess at least for Tata motors at this time. This is a good move by CCI. CCI needs to spread its hand to the 2 wheeler manufactures also.
 
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Re: Competition Commission Imposes Rs.2,545 Crore Penalty on 14 Carmakers

Tata motors is penalized more than 1300 crores out of the 2500 crores, nearly half of the amount. They are the largest automotive company by revenue that spreads across Trucks & buses, luxury brands JLR and passenger.

But spares of trucks & buses and passenger vehicles are available freely in the market. I have seen exclusive spares outlets in Ranigunj and Opp Osmania gen hospital in Hyderabad apart from other multibrand spares stores across HYD.

Similarly Mahindra too sell their spared across such outlets.
 
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Re: Competition Commission Imposes Rs.2,545 Crore Penalty on 14 Carmakers

A welcome move,even if the fine seems less compared to their profits.But we need to have a start,ain't we.Hope this forces the fleecing by auto manufacturers to stop.
 
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Re: Competition Commission Imposes Rs.2,545 Crore Penalty on 14 Carmakers

Tata motors is penalized more than 1300 crores out of the 2500 crores, nearly half of the amount.
But spares of trucks & buses and passenger vehicles are available freely in the market. I have seen exclusive spares outlets in Ranigunj and Opp Osmania gen hospital in Hyderabad apart from other multibrand spares stores across HYD.

Similarly Mahindra too sell their spared across such outlets.
TATA might have forced monopoly over JLR products in India.
Mahindra might have indulged in monopoly over oil or some other aspects. Even Maruti Suzuki was not spared.
 
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Re: Competition Commission Imposes Rs.2,545 Crore Penalty on 14 Carmakers

CCI is a double edged sword, isnt it.

NOW from a consumers perspective:
- I have owned TATA for almost a decade now. And majority of the service has been done by my mechanic. NOT TASC. I have never faced an issue with non availability of spares.
- I think this "non availability of spares across the counter" is used to note that the ASC will not sell the spares to you directly and will only accept works contract. Now whats the issue here. The service center has all the rights to not sell the spares and keep it available for their works.
- Now if courts dont listen to all sides of the case and try to be the messiah of the common man, then it'll have a big impact. Manufacturers will start reducing the warranty periods as they will not take responsibility for the job not done under their supervision (ie not done in ASC).

NOW from a service centers view point. An ASC can survive only if they have service contracts. Selling cars gets them nothing. Sale of spares and service is where they make money. So they are not wrong if they are trying to protect their investment.

PS: TATA makes spares available through local retail counters branded as TOP (TATA Original Parts). Same with Maruthi Suzuki. They branded it MGP (Maruthi Genuine Spares). So I dont understand the real issue behind this penalty.
 
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Re: Competition Commission Imposes Rs.2,545 Crore Penalty on 14 Carmakers

Here is the break-up of the fines
Tata Motors Rs. 1,346.46 crore
Maruti Suzuki Rs. 471.14 crore
Mahindra & Mahindra Rs. 292.25 crore
Toyota Kirloskar Motors Rs. 93.38 crore
General Motors Rs. 84.58 crore
Honda Siel Rs. 78.47 crore
Skoda Auto India Rs. 46.39 crore
Ford India Rs. 39.78 crore
Fiat India Automobiles Rs. 29.98 crore
BMW India Rs. 20.41 crore
Mercedes-Benz Rs. 23.08 crore
Hindustan Motors Rs. 13.85 crore
Volkswagen India Rs. 3.25 crore
Nissan Motors. RLS. 1.63 crore
 
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Re: Competition Commission Imposes Rs.2,545 Crore Penalty on 14 Carmakers

A step in the right direction car companies would never dare to do in developed countries or China and here they get away with murder. The next step would be to enforce responsibilities of car companies in respect to the defective cars sold.
 
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Re: Competition Commission Imposes Rs.2,545 Crore Penalty on 14 Carmakers

Delhi high court stays CCI fine on Maruti Suzuki
The court said the order by the Competition Commission of India (CCI) will not take effect until the Madras high court disposes of a petition filed before it by Hyundai Motor India Ltd, which has obtained a stay on the order.
Consumers would have to wait till Jan 2015 for the verdict and see if it brings them any relief.
source:Delhi high court stays CCI fine on Maruti Suzuki - Livemint
 

Akash1886

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Re: Competition Commission Imposes Rs.2,545 Crore Penalty on 14 Carmakers

Buddies,

Hyundai seems to have hit rough weather.

The Competition Commission of India (CCI) has imposed a penalty of Rs 420 crore on leading automobile manufacturer Hyundai Motors for unfair trade practices. The competition regulator found Hyundai guilty of indulging in in anti-competitive practices as the company did not make genuine spare parts freely available in the open market.
Link

Regards

Akash
 
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Hyundai Motor India FINED

[surprise]


The Competition Commission of India has slapped a penalty of Rs 420 crore on Hyundai Motor India Limited for unfair trade practices. There were two other carmakers in the dock too, namely Mahindra Reva Electric Vehicles Pvt Ltd, and Premier Ltd for violation of competitive practices. The latter two, however, were spared the fine according to an official CCI statement.

CCI found Hyundai Motor India Ltd (HMIL) guilty of violating the competitive practices, not making its genuine spare parts freely available in the open market. This forced the customers to get their cars compulsorily repaired only at the Authorized Hyundai services stations, and not at third party garages, which turn out cheaper for car owners, but take away some share of the automaker’s revenues.

The fine was calculated at 2% of the HMIL’s average turnover. The company has been asked to pay the fine within a period of 60 days, along with a notice to cease and desist from such practices.

“The car company was found to be indulging in practices resulting in denial of market access to independent repairers as the latter were debilitated to provide services in the aftermarket for repair and maintenance of cars for want of genuine spare parts,” a CCI statement said.

" “The car companies were found to be indulging in practices resulting in denial of market access to independent repairers as the latter were debilitated to provide services in the aftermarket for repair and maintenance of cars for want of genuine spare parts. Further, these car companies were also found to be using their dominant position in the market for spare parts and diagnostic tools to protect their market for repair services, thereby distorting fair competition” the CCI statement said.

In the case of Reva, the Commission, in its investigation, observed that the company’s spare parts were, to some extent, available over the counter,” it said.

“Considering the mitigating factors that worked in favour of Reva and Premier, the two car companies were absolved from paying monetary penalty,” the statement added. "

-- Source Motoroids.com

But my question here is , if a company is following such policies which would rather help the long run of our cars , why does the CCI find this not a fair practice .

What i feel is if Genuine parts are available only at ASS , means , Our car goes for repairs into the best trained hands , and does not ever affect our car warranty by any means .
 
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Re: Hyundai Motor India FINED

Normal jobs such as Oil change, bulb change ,etc can be done by self means also,it doesn;t require an extra skill, such can be done either outside.
For these spares must be provided by respective companies.
 
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Re: Hyundai Motor India FINED

Normal jobs such as Oil change, bulb change ,etc can be done by self means also,it doesn;t require an extra skill, such can be done either outside.
For these spares must be provided by respective companies.
True , these things can be done either yourself or at some service station outside , but these things like bulb , oil , etc done have a particular brand . Once you get your service done outside , your would always go for synthetic oil , and osram bulbs .
 

Akash1886

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Re: Competition Commission Imposes Rs.2,545 Crore Penalty on 14 Carmakers

Friends,

Update:

The competition appellate tribunal Compat on Friday disposed appeals of Ford, Nissan, Toyota Kirloskar, and found them to be guilty of indulging in unfair practices in the spare parts market.

While pronouncing its oral order, Compat said these automakers have been penalised 2% of their turnover in the spare parts market. And what's more, the Compat has also given directions to create a level playing field in after sales service.
Link

Regards

Akash
 

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