2014 Mercedes-Benz SL-Class (SL63 AMG)Enlarge Photo
China is the world's largest car market, and automakers are scrambling to get in on the action. However, a recent government crackdown is dampening enthusiasm at some of them.
Mercedes-Benz has been found guilty of manipulating prices for dealer service and parts in the country, China's Xinhua (via Reuters) reports. The Jiangsu Province Price Bureau reportedly found evidence of these practices after raiding Mercedes dealerships in the eastern coastal province, and an office in neighboring Shanghai.
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Mercedes parent Daimler said it is cooperating with authorities, but has not made any other statements on the matter. Chinese officials haven't publicly disclosed penalties for the German carmaker either.
The raids were just another example of the Chinese government's recent attempts to more-stringently enforce anti-monopoly laws enacted in 2008. Accusations from domestic media that carmakers are overcharging Chinese customers for spare parts has led to increased focus on the industry by China's National Development and Reform Commission (NDRC).
The laws empower the NDRC to impose a fine of between 1 and 10 percent of a company's revenues for the previous year. Last week, it was announced that Audi would be fined 250 million yuan (about $40.6 million at current exchange rates) for unspecified violations by its sales division in the province of Hubei. In addition to Audi and Mercedes, Chrysler is reportedly under investigation as well.
In response to the crackdown, German manufacturers are lowering prices. Mercedes will reportedly cut the price of certain spares by 15 percent, BMW will cut prices by an average of 20 percent, and Audi will lower its prices by an unspecified amount.