Hyundai has joined the list of companies that have been imposed with penalties for being indulged in anti-competitive practices in the country, while Reva and Premier were just warned.
Fair trade regulator CCI (Competition Commission of India) is imposing penalties and warnings on car manufacturers in the country that are found to restrict the sale of spare parts in the open market. Hyundai was just slapped with a penalty of Rs. 420.26 crores and two other brands including Reva and Premier were asked to ‘cease and desist’ from anti-competitive practices. This comes after the fact that a total penalty amounting to Rs. 2544.64 crores was imposed on 14 different car manufacturers including Fiat, Honda, BMW, Volkswagen, General Motors, Ford, Mahindra, Maruti Suzuki, Hindustan Motors, Mercedes-Benz, Tata, Skoda, Nissan and Toyota in August last year for the same issue.
Since there were no certain “mitigation factors” that worked in favor of Reva and Premier, therefore no penalty was imposed to the two companies. The now total of 17 car makers made their customers get their vehicle repaired only through the company’s authorized service centres or else the vehicle’s warranty would not be applicable any further. These companies also restricted the sale of spare parts over the counter, which directly results in violating the fair competition norms. As per the order, a penalty of 2 percent of the average annual turnover for three financial years is considered in India, which amounts to Rs. 420.26 crores. Hyundai even applied for a reduced penalty amount but the plea was rejected by CCI.
Hyundai, Reva and Premier have been asked to sell spare parts in the open market with no restrictions whatsoever. Premier and Reva were able to get off without any penalty because they did not prevent the sale of spare parts over the counter but were only warned because there were only a few bits of infringements. Each of the opposing parties (Hyundai, Reva and Premier) has to file an undertaking within 60 days of the order which will be followed by a detailed compliance report within 180 days from the receipt of the order. Hyundai will have to pay the penalty withing 60 days of this receipt. However, all orders made by CCI can be challenged before the Competition Appellate Tribunal.