A major blow to the automobile companies in India has come in the form of a heavy penalty by the Competition Commission of India (CCI). It has imposed a combined penalty of over INR 2,500 crore on 14 carmakers for indulging in unfair practices in the spare parts market. The fine has been calculated at two per cent of average turnover.
Tata Motors faced the maximum fire with a fine of INR 1,346 crore as it appears that CCI has taken the JLR revenues also into account with Tata Motors’ while arriving at the figure. Maruti Suzuki is next in line with a fine of INR 471 crore, and Mahindra & Mahindra takes the third slot at INR 292 crore. General Motors and Honda Siel have been slapped fines of INR 85 crore and INR 78 crore respectively.
Volkswagen, Fiat, BMW, Ford, Hindustan Motors, Mercedes-Benz, Nissan, Skoda Auto, and Toyota Kirloskar are the other companies on whom fines have been imposed. Companies have been given 60 days to comply with the order. Hyundai India had obtained a stay order from the Madras High Court against proceeding by CCI in the case.
CCI, in its 215-page order, has laid out that auto companies indulged in anti-competitive practices as they did not make genuine spare parts freely available in the open market – upholding the contentions of a petition filed by a complainant in 2011. Most of the companies will certainly challenge the order.
Disgruntled customers may now heave a sigh of relief with this development, which is being touted as the toughest yet in a series of enforcement actions by the newest among India’s regulators.