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India Fines Carmakers For Violating Anti-Trust Laws


2012 Tata Nano

2012 Tata Nano

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Following a crackdown by the Chinese government on carmakers allegedly violating anti-monopoly laws, India is slapping companies with fines too. Just like in China, Indian regulators say carmakers are fixing prices on spare parts, Bloomberg reports, and recently fined 14 companies a combined 25.4 billion rupees (about $420 million at current exchange rates).

The fines were equivalent to 2 percent of the carmakers' three-year average revenue in the country, a Competition Commission of India order said. The regulator in charge of enforcing anti-monopoly laws also ordered the companies involved to provide spare parts and diagnostic equipment to independent garages, and honor warranties on cars repaired by them.

The Commission found that carmakers were charging higher prices for spare parts not sold to authorized repair shops. Fiat's markup was reportedly from 19.9 percent to 4,817 percent. Regulators say car companies are trying to squeeze out independent repair shops.

Domestic carmaker Tata Motors—maker of the diminutive Nano—received the highest fine at 13.5 billion rupees ($223 million). Honda received the highest fine for a foreign automaker, at 784 million rupees ($12.9 million). Other carmakers fined included the local units of Fiat, BMW, Ford, General Motors, Mercedes-Benz, Nissan, Toyota, and Volkswagen.

While companies are rushing to lower prices in China in response to investigations there, little action has been taken in India so far. Mahindra, which was fined 2.92 billion rupees ($48.2 million), plans to appeal the decision.

With this round of fines in India and the investigation of Audi, Chrysler, and Mercedes in China, companies are now under more scrutiny in two of the world's largest car markets outside the West.

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