The world’s third largest premium automaker, Mercedes-Benz, has been fined 350 million yuan ($56.49 million) this week by a local Chinese authority because it was involved in illegal pricing fixing practices.
The regulator disclosed that the German luxury automaker coerced the Chinese dealers to impose a minimum level of pricing for a portion of the make’s automobiles and spare parts, also warning the dealers that failed to comply with the rules. The Chinese government and local authorities have been targeting the auto sector, reigning down on foreign automakers heavily last year for involving in illegal price fixing practices for years – fining in the process the Chinese venture of Volkswagen AG and a sales division of Fiat Chrysler Automobiles NV for a total of $46 million. Additionally, numerous other brands engaged in voluntary price cuts of spare parts and certain models to avoid government fines. “The investigation found Mercedes-Benz and its dealers in Jiangsu came to and carried out monopoly agreements to cap the lowest sales prices of E-Class, S-Class models and certain spare parts,” commented the Jiangsu pricing regulator in a recent statement.
A Chinese spokesperson for Daimler acknowledged both the investigation and imposed penalties, after the Jiangsu pricing bureau revealing the German brand was not complying with the anti-monopoly law, harming fair market competition and skimping on consumer rights. The local regulator also imposed a fine of 7.7 million yuan on some of the dealers from the sales network of the premium manufacturer.