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Competition commission order to ensure car spare parts market is less costly: Chairman

New Delhi: After imposing a penalty of Rs. 2,545 crore on 14 carmakers for unfair trade practices, the Competition Commission of India (CCI) on Friday said it wanted to ensure that spare parts maintenance market
PTI August 29, 2014 20:52 IST
PTI
New Delhi: After imposing a penalty of Rs. 2,545 crore on 14 carmakers for unfair trade practices, the Competition Commission of India (CCI) on Friday said it wanted to ensure that spare parts maintenance market gets less expensive for consumers.
 
The Competition Commission of India (CCI) on Monday penalised the auto makers for unfair business ways in the spare parts and after services market.
 
“Our whole attempt was to ensure that the spare parts maintenance market gets more broad based and user friendly and less expensive for consumers,” CCI chairman Ashok Chawla said while speaking at a conference organised by industry body Assocham in Delhi.
 
Apart from slapping the penalty, the competition watchdog has directed the carmakers to “cease and desist” from anti-competitive practices.
 
According to Mr Chawla, the government should also look at the issue for having a framework with regard to auto spare markets and after services market.
 
A copy of the CCI order would be sent to the Ministry of Road Transport and Highways and the Automotive Component Manufacturers Association (ACMA).
 
On issues related to intellectual property rights, the CCI chief said the regulator recognises such aspects.     The penalty has been imposed on Maruti Suzuki, Tata Motors, Honda Siel Cars India, Volkswagen 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.
 
Maruti Suzuki India, Mahindra & Mahindra and Tata Motors have said they would challenge the order.
 
“I believe what CCI has done (is) that they have not understood the entire issue of spare parts of cars. What they are saying may apply to other industries (but not in auto)... There is a lack of understanding of the difference. (The auto) industry by its nature is totally different,” Maruti Suzuki India chairman R C Bhargava had said.
 
A detailed CCI investigation had revealed that these car companies violated competition norms with respect to its agreements with local Original Equipment Suppliers (OESs) as well as in terms of pacts with authorised dealers.
 
CCI had also found that these companies, which were found to be dominant in the after markets for their respective brands, abused their dominant position affecting around two crore car consumers, it added.
 
“The 14 car companies were found to be indulging in practices resulting in denial of market access to independent repairers as the latter were not provided access to branded spare parts and diagnostic tools which hampered their ability to provide services in the aftermarket for repair and maintenance of cars,” CCI had said.