Last month we told you about how foreign car makers were using monopolistic practices for selling their cars and car parts at astronomical prices in China. The entire problem scaled up further when the National Development and Reform Commission (NRDC) of China took charge and issued an anti-monopoly probe against foreign car makers that included luxury car makers. Now, in response to the investigation Japanese giants Toyota, Honda and Nissan have announced a cut on the prices of their spare parts. This also acknowledged the fact that the probe was not limited to luxury car makers alone.
The last month saw European automakers Mercedes, BMW, Audi, Jaguar Land Rover as well as American giant Chrysler announce price cuts on car parts, after the NDRC stepped up scrutiny in the industry. China is the world’s biggest auto market that is dominated by foreign car makers, which work in collaboration with domestic companies. Case in point, Toyota is in a joint venture with China’s GAC Group, while the latter also works in tandem with Honda. Nissan on the other hand works with China’s Dongfeng Group. The companies had been paying close attention to the investigation and thus concluded on reducing prices.
If found guilty, both the foreign and domestic firms with have to face liabilities as stated by the Chinese ministry. Experts suggest that automakers have had too much leverage over car dealers and part suppliers, which enables them to control the part prices in the market and is a violation by China’s both-trust laws. The anti-trust laws have been made to promote fair competition as well as consumer interests of the people of China and the probe also extended to other industries as well including milk powder and software.