China Fines Audi And Chrysler For Price Fixing

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In a crackdown on monopoly behavior in the Chinese auto industry, regulators have found Audi and Chrysler guilty of price fixing of cars and spare parts. Both automakers were slapped with fines by China’s anti-monopoly regulator, the National Development and Reform Commission (NDRC), mostly for the practice of enforcing minimum prices that dealers were required to charge.

According to the NDRC, FAW-Volkswagen Sales, which is responsible for the Audi brand in China, was charged 249 million yuan (approximately $40.6 million) and eight Audi dealers were charged a total 29 million yuan ($4.7 million). Chrysler was charged with a 32 million yuan ($5.2 million) fine and three of its dealers were charged a total 2 million yuan ($320,000).

The fines are the result of a probe into monopoly behaviour in the auto industry, with a number of automakers, including BMW and Mercedes-Benz, currently under investigation. It’s been reported that the latter has also been found guilty and thus is likely to receive some fines in the near future.

The fines are calculated using a 2008 ruling that allows regulators to impose a fine of between 1 and 10 percent of a company's revenues for the previous year.

International investors have complained that foreign firms have been unfairly targeted, but the response from regulators is that investigations are only instigated following complaints from customers. There have also been accusations from domestic media that automakers in general are overcharging customers for spare parts, which also led to the investigation.

Other countries are also looking into the matter, with the Indian government reported to have also fined several automakers for similar practices.

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