Report – Mercedes-Benz also found guilty in China antitrust investigation image

Xinhua, the official Chinese news agency, has reported that after Audi, Mercedes-Benz – the third-biggest premium automaker in the world – has also been found breaching anti-monopoly laws.

Citing sources inside the country’s regulators, Xinhua said that Mercedes-Benz manipulated prices for a number of after-sales services in China – but so far hasn’t said what fines will be imposed. Just as the case with Volkswagen’s premium unit Audi, the National Development and Reform Commission (NDRC), the nation’s anti-trust enforcer, can penalize the local unit of Mercedes-Benz with up to 10% of the company’s China profit made during the past year.

“It is a typical case of a vertical monopoly in which the carmaker uses its leading position to control the prices of its spare parts, repair and maintenance services in downstream markets,” told Xinhua Zhou Gao, chief of the anti-trust investigation at the Jiangsu price bureau.

Besides other business sectors, the automotive industry has been particularly hit by the ongoing price fixing probes, with automakers from Audi to Toyota hastily deciding to cut prices of spare parts and even other services or vehicles. According to Citi experts, the possibility of China’s antitrust regulators to impose penalties on annual revenues is very serious – even if only a 1% fine is imposed on annual earnings, the move could in the long run affect as much as 10% of the joint venture’s net profit.

Via Reuters