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Home China Report Business Germany car companies are going to cut their spair part prices in China amid antitrust investigation

Germany car companies are going to cut their spair part prices in China amid antitrust investigation

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This week, BMW AG joined other Germany auto companies, including Daimler AG’s Mercedes-Benz unit and Volkswagen AG’s Audi brand, in reducing prices of spare parts in China amid an antitrust investigation into the auto industry.
BMW will cut prices on more than 2,000 components by an average of 20 percent starting Aug. 11, the automaker said in an e-mailed statement late Thursday. The company also said its authorized dealerships will set up more outlets in large cities including Beijing and Shanghai to sell original parts to independent workshops to help provide consumers more choice.

China, home to the world’s largest auto market, is stepping up scrutiny over how much foreign automakers charge for vehicles and spare parts. The government began looking into possible antitrust violations in the auto industry at the end of 2011 as state media accused carmakers for inflating prices and overcharging consumers.

“Recently, the National Development and Reform Commission’s Price Supervision and Anti-Monopoly Bureau expressed great concerns over existing problems in the auto industry and after-sales service sector,” BMW said in the statement. “BMW has been paying close attention and in response, is making the effort to bring down wholesale prices and promoting the flow of original parts.”

In the first seven months of the year, BMW has cut prices on more than 3,300 pieces of original parts by an average of 15 percent, of which 108 products were cut by 20 percent to 50 percent, according to the statement.

Mercedes, Chrysler

Antitrust officials in eastern Jiangsu province have begun investigations of Mercedes-Benz dealers in five cities including Suzhou and Wuxi, while Mercedes-Benz’s Shanghai office was raided by local NDRC officials, NDRC spokesman Li Pumin said in a briefing in Beijing this week. The government will also soon punish Chrysler Group and Audi for engaging in monopolistic actions, he said.

Daimler plans to cut spare-part prices for its Mercedes-Benz vehicles in China by an average of 15 percent starting next month, while Audi’s Chinese joint venture said in late July that the brand would lower replacement costs of its parts by as much as 38 percent on Aug. 1.

The NDRC is undertaking the investigation to protect the competitive order of the auto industry and to safeguard consumer interests, Li said at this week’s briefing. The commission has completed an investigation into 12 Japanese companies and will soon announce the actions it will take, he said.