Friday, August 10, 2012
By Manoj Kumawat
Car makers follow anti-competitive practices: CCI probe on
At a time when India is fast moving ahead a one of Asia’s best car markets and some of the cars such as Maruti Swift and Swift Dzire are doing so good to the industry, there is also a need to keep a close watch on the behavior and policies of car makers so that customer interests are not compromised. One such body for this purpose if the Competition Commission of India (CCI). This commission which is in operation since 2009 is investing complaints that some car makers are following anti-competitive practices. The details as to who are the carmakers are still unknown but the reports suggest that it is some ‘dominant position’ car maker.
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As per the details available, the car maker is alleged to have been selling spare parts through its dealers only and these dealers are charging higher price from the customers. This is in violation of the Sections 3 and 4 of the Competition Act, 2002 as being sold solely by the dealer there is no competition and hence the interests of the customer is compromised. Notably, this is a regular practice by car makers in India that the spare parts are available at select stores and dealers only and that is why there is no scope of competition leading to at will pricing of the spare parts. This matter has become more important with the inflow of several foreign car makers in India as being relatively new in the market these car makers do not have spare parts available at anywhere else and thus there is high probability that they may charge a higher price.
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In India spare parts of Maruti, Tata, Mahindra and Hyundai cars are available almost everywhere but genuine spares are available at select locations. For popular cars such as Maruti Alto, Tata Indica, Tata Indigo eCS and others, the parts are freely available. However, for newer cars such as Renault Duster or for cars of any new brand, the spare part availability is restricted to the dealer or some select locations. And this seems to be the matter.