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CCI Imposes Penalty on 14 Car Makers

Discussion in 'Fiat India News' started by zenwalker, Aug 25, 2014.

  1. zenwalker

    zenwalker Esperto

    Messages:
    2,150
    Bangalore
    http://www.business-standard.com/ar...-penalty-on-14-car-makers-114082501295_1.html

    In the first major order against the auto sector, the Competition Commission today slapped a penalty of Rs 2,545 crore on 14 car makers, including Maruti Suzuki and Tata Motors, for violating trade norms in the spare parts and after services market. Honda Siel Cars India, Volkswagen India, Fiat India Automobiles, BMW India, Ford India, General Motors India, Hindustan Motors, Mahindra & Mahindra, Mercedes-Benz India, Nissan Motor India, Skoda Auto India and Toyota Kirloskar Motor have also been penalised.

    Source: Business Standard
    renlouis, limraj and asimpleson like this.
  2. kailasmenon2000

    kailasmenon2000 Superiore

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    609
    Chennai
    Thats a great news :)
  3. zenwalker

    zenwalker Esperto

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    2,150
    Bangalore
    But many vendors are already getting beaten up in the market like FIAT, on top of that yet another blow. Not sure how it shall be taken up :rolleyes:
  4. asimpleson

    asimpleson Esperto

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    3,000
    Heptanesia
    Linea 1.3
    Amazing piece of information. Thanks a ton for the same Zenwalker..!

    Well they are all in a boat, expect nothing less than a united front from them to argue for the collective interests of all car makers.
    Last edited by a moderator: Aug 28, 2014
  5. zenwalker

    zenwalker Esperto

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    2,150
    Bangalore
    I guess this kinda of misusing the dominant position is always there regardless of the business markets.
    However i am not sure if i understand the first line you have quoted above properly. :eek:
  6. bediman

    bediman Timido

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    4
    The CCI is being indiscriminate, a simplistic judgment this. Hyundai has not been penalised? Even though their spares are exorbitantly priced, even if available over-the-counter? Tata Motors and Fiat have been penalised even though their spares' pricing is by far the most ethical, with the least (if any) price-gouging?!

    The CCI should now very kindly consider the elephant in the room: the acute and increasing market concentration, oligopoly-like (70% +) in the sub-10 lakh segments, wantonly dominated by just three East Asian firms, who enjoy margins, it is rumoured, to rival the luxury German marques.

    Caused in my opinion by the economies of scale they enjoy in sales and therefore after-sales service (especially Maruti and Hyundai)that then prevents, through feedback loops of resale value and expensive and difficult to break/make ASS reputations, other firms from competing on a level-playing field. Also caused by information deficits and assymmetries that the vast majority of buyers, very often first-time and extremely risk-averse, suffer from.

    Or so I'd argue. Methinks the CCI needs to start an investigation, the prima facie evidence is strong indeed, and getting stronger.
    renlouis, Ravi, teky and 1 other person like this.
  7. asimpleson

    asimpleson Esperto

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    3,000
    Heptanesia
    Linea 1.3
    Some of the points or arguments you made a very good Bediman. :) However, I don't think the CCI is shooting in dark here to see what sticks. This whole thing smells and suggest some extraordinary bureaucratic homework and some strong political will or backing. Within legal framework all laws that are deemed broken will be pointed out here. Although as per your arguments in a legal forum, maybe at level of Supreme court, there could be such observations made and questions asked to government officials if companies can prove discrimination in their arguments, still there will be penalties maybe at lesser extent and also directives by SC supporting the cease and desist at minimum. Surely far from an open and shut case.

    What needs to be seen now is how companies try to wriggle out of this situation. I will watch this one closely.

    Motto of most car makers --
    Profit is GOOD, Unethical Profit has been Interesting,
    Fooling customers is Bad, Karma getting back is Interesting, Life just got more Interesting..!

    Sorry couldn't resist myself, some if not all UNO/Palio/Siena/Petra customers too will see some light at the end of the tunnel. :D

    Absolute welcome move I say, by the CCI. Morons should have moved earlier.
    bediman likes this.
  8. limraj

    limraj Superiore

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    915
    Trivandrum
    Linea 1.3
    It is good news. Would this mean 99rpm can now sell Linea and Punto spares?
  9. zenwalker

    zenwalker Esperto

    Messages:
    2,150
    Bangalore
    @limraj,
    They were selling the spares from last year or so. I wonder how it shall change now?
  10. nkrishnap

    nkrishnap Staff Member Janitor

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    1,900
    Bangalore
    Bangalore
    Linea 1.3
    The challenge for the manufacturer I see is how they control the fake parts in the market. Free access to OEM parts gives scope of duplication. The reason I see this as an issue is I have seen fake parts such as air filters very much available in JC Road and costs lot less too.

    Selenia WR semi synthetic diesel engine oil costs 600 odd bucks which is outrightly rubbish pricing as the Mobil 1 Delvack is available for 850 bucks per litre which is fully synthetic and far superior.

    Instead there should be sanity with respect to pricing of the parts and the labour charges. This will help people who are not comfortable to take the car to the neighbourhood garage.

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