According to a report of an investigation probed by Competition Commission of India (CCI), a few among the auto giants in India are deliberately been engaging in anti-competitive practices by restricting supply and sales of spare parts in the free market.
The investigation probe was launched by CCI in March 2011 after a car buyer accused companies of abusing their dominant position by making spare parts available only through their authorised dealers, who in turn were allegedly sold them at high rates. This investigation probe was spread for over a year during which it spoke to the automakers, component manufacturers and open market players and studied after-market supply chain. According to TOI, the Director General (Investigation) has accused the auto players of controlling and restricting supplies only to their network.
After the final outcome, companies like Honda, Volkswagen, Ford and General Motors have refused to comment without going through the report in detail. Toyota believes in exclusivity as Mr. Shekar Viswanathan, MD, Toyota Kirloskar Motors, say: “Clearly it is not anti-competitive. Only accredited people should be allowed to fix parts as it is in the interest of the customers”. “It is inherently unsafe for non-trained people to fix parts”, he also added. GM and Ford both said that they need time to review the development and understand the report before commenting while Honda remained unavailable for comment.
This practise is increasing with the entry of new competitors in the market. Established companies like Tata, Maruti Suzuki and Mahindra and Mahindra made their spare parts available in the open market. CCI will go through the findings of the investigation and hear the car makers and other parties before deciding anything strict. Though there might be a good news for all the car owners. A new rule might force car companies to sell their spare parts in the open market, restricting exclusivity. The companies will also have to change their warranty policies so that if a customer gets any faulty part replaced in the open market, the warranty of the car won’t be void.
Good times to come? What do you think?
News Source: TOI