BEIJING (Reuters) -- China said it will punish Audi and Chrysler as well as some 10 Japanese spare-parts makers for violating the country's anti-monopoly law.
The National Development and Reform Commission (NDRC), responsible for enforcing rules against anti-competitive pricing, today said that it had found Chrysler in Shanghai and Audi in Hubei to be engaging in monopolistic behavior.
The government has also completed investigations into 12 Japanese auto-parts makers and will mete out punishment to those found to be breaking the anti-monopoly law, Li Pumin, spokesman of the NDRC, said at a press conference in Beijing.
The NDRC did not identify the spare-part makers and did not say how many of them would be punished.
The NDRC did not specify the punishment for Chrysler or Audi. Under the six-year-old anti-monopoly law, the NDRC can impose fines of between 1 and 10 percent of a company's revenues for the previous year.
"NDRC would normally set a percentage of annual sales in relevant markets as fines based on how cooperative the companies are," said Colin Liu, a lawyer in the automotive industry.
Industry experts say automakers have too much leverage over car dealers and auto part suppliers, enabling them to control prices, considered as a violation of China's anti-trust laws.
"Monopolistic practices are quite rampant in the auto industry. NDRC is first targeting imported luxury brands because the problem is most severe in this area," said Yale Zhang, managing director of consultancy Automotive Foresight (Shanghai) Co. Ltd. "It's also a warning signal to the industry. If top brands like Audi gets punishment, others would know what to do."
Zhang said imported luxury cars in China cost, on average, 2-1/2 to three times their price in the United States. The price difference is due to higher import duties and other taxes, foreign carmakers have argued.
China has stepped up scrutiny of pricing practices as the country becomes an increasingly important source of profit for foreign automakers. The state media have criticized the companies for selling imported cars at higher prices than in other markets and overcharging for spare parts.
Antitrust officials in eastern Jiangsu province have begun investigations of Mercedes-Benz dealers in five cities including Suzhou and Wuxi, while Mercedes' Shanghai office was raided by local NDRC officials.