Mercedes-Benz found guilty of price-fixing in China

Associated Press

Mercedes-Benz has been found guilty of fixing prices of car parts in China – with BMW, Audi and Chrysler also facing penalties.

China’s state news agency, Xinhua, reports that the German manufacturer has been found guilty of using its power to control the prices of parts.

The Chinese government is cracking down on monopolies and has been accused of being too harsh on companies from abroad.

It comes after local media complained that foreign car manufacturers were overcharging Chinese customers for vehicles and spare parts.

A report from the China Automotive Maintenance and Repair Trade Association found that replacing all the spare parts in a Mercedes-Benz C-Class could be 12 times more expensive than buying a new car.

Chief of Jiangsu’s anti-monopoly unit, Zhou Gao, told Xinhua:

"Mercedes-Benz is a typical case of vertical price fixing - that is, the use of its dominant position in after-market parts to maintain price controls.”

The carmaker, which is hoping to boost Chinese sales to more than 300,000 cars in 2015, could be fined up to 10% of its revenues in China last year.

But to appease regulators, manufacturers are reportedly cutting prices of new cars and parts in a drive that critics describe as anti-competitive.

Previously, four BMW dealers in central China’s Hubei province had been fined a combined 1.6m yuan (£156,000) for price fixing.

As well as the motor industry, companies in the pharmaceuticals, technology and food sectors have also been investigated as part of the probe.

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By Andrew Brady, Motoring Research