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China To Fine Audi For Breaking Monopoly Law, Other Makes Under Investigation


Audi Q3 Trans China Tour 2011

Audi Q3 Trans China Tour 2011

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With an ever-expanding middle class, China has proved to be a boon to global automakers. However, strong sales are sometimes accompanied by other issues.

China will fine Audi around 250 million yuan (about $40.6 million at current exchange rates) for violating an anti-monopoly law, according to a new report from Reuters. The fine is calculated based on a percentage of the German carmaker's 2013 sales in the province of Hubei, where the alleged violations took place.

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The National Development and Reform Commission (NDRC) has been investigating the practices of Audi's sales division in Hubei. Audi said the sales arm—which is jointly operated with the government-owned FAW Group—had violated "part" of the country's anti-monopoly law, and would accept the penalty.

The exact nature of the violation is unclear, but carmakers have been accused of overcharging customers for spares recently by state media, and the NDRC is looking to enforce the anti-monopoly law more robustly across all industries.

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Enacted in 2008, the law allows the NDRC to impose a fine of between 1 and 10 percent of a company's revenues for the previous year. While China's economy is decidedly capitalist these days, its authoritarian government still seeks to maintain tight control of things.

Audi may not be the only carmaker to be penalized. The NDRC is reportedly investigating Mercedes-Benz and Chrysler as well.

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