Japanese Carmakers Cut Parts Prices in China After Monopoly Probe
Toyota, Honda and Nissan join global brands in lowering spare parts prices as China’s anti-monopoly crackdown widens beyond luxury marques.
Toyota, Honda and Nissan have cut prices on spare parts in China after pressure from the country’s anti-monopoly regulator, extending a wave of price reductions that began with foreign luxury brands. The move follows a high-profile investigation by the National Development and Reform Commission (NDRC) into alleged price-fixing and anti-competitive practices in the auto industry.
GAC Toyota Motor Co and Guangqi Honda Automobile Co, joint ventures between the Japanese brands and China’s GAC Group, confirmed price reductions for spare parts in early August 2014. Nissan’s partnership with Dongfeng Motor Group said it was considering further changes after taking regulator feedback on board. These announcements came days after similar moves from BMW, Mercedes-Benz, Audi, Chrysler and Jaguar Land Rover, all of which had been under scrutiny for parts pricing and sales practices.
Regulator targets pricing power
The NDRC has accused automakers of using their position to control prices, particularly for aftersales parts. Industry experts argue that foreign brands have long enjoyed strong leverage over both dealers and suppliers, restricting independent repairers’ access to original components and pushing up costs for consumers. The regulator’s intervention is aimed at promoting fairer competition and curbing practices seen as violations of China’s anti-monopoly law.
The NDRC’s enforcement has not been limited to carmakers. In August 2014, it fined ten Japanese auto parts suppliers, including Sumitomo Electric, Denso, Aisan, Mitsubishi Electric, Mitsuba, Yazaki, Furukawa Electric, NSK, JTEKT and NTN, a total of 1.24 billion yuan (about $201 million) for colluding on prices over a period of more than a decade. Two other companies, Hitachi Auto Parts and Nachi, avoided penalties by cooperating with the investigation and providing evidence.
Impact on the market and manufacturers
While some industry insiders voiced concern that forced price reductions could disrupt the Chinese market, the China Automobile Dealers Association argued that the crackdown would ultimately benefit both consumers and the sector by encouraging more transparent pricing and greater competition. The regulator’s actions have also prompted manufacturers to widen access to original parts, allowing independent repairers to source components outside official dealer networks.
Japanese carmakers and suppliers have pledged to comply with Chinese law and review their business practices. The NDRC has maintained that its investigations are not targeting foreign firms specifically, but rather aiming to enforce fair competition across the industry. State media reported that more than 1,000 companies, both domestic and foreign, were under scrutiny as of mid-2014.
| Company | Fine (million yuan) |
|---|---|
| Sumitomo Electric | 290.4 |
| NSK | 174.9 |
| Denso | Not specified |
| Aisan | Not specified |
| Mitsubishi Electric | Not specified |
| Mitsuba | Not specified |
| Yazaki | Not specified |
| Furukawa Electric | Not specified |
| JTEKT | Not specified |
| NTN | Not specified |
