Latest Car News in India

Tuesday, August 26, 2014

By Jitendra Singh

Penalty of Rs.2,545 crore imposed on major car makers

The Competition Commission of India has imposed a combined penalty of over Rs 2,500 crore on 14 carmakers for indulging in unfair practices in the spare parts market, the latest in a series of tough enforcement actions by the newest among India's regulators. Tata MotorsBSE -0.66 % faces the maximum fine of Rs 1,346 crore, followed by Maruti SuzukiBSE -0.69 % Rs 471 crore, Mahindra & Mahindra Rs 292 crore, General Motors Rs 85 crore, Honda Car India Rs 78 crore. 
The decision, spelt out in a 215-page order, says that auto companies indulged in anti-competitive practices as they did not make genuine spare parts freely available in the open market, upholding the contentions of a petition filed by a complainant in 2011. The fine has been calculated at 2% of average turnover. "It's too early to comment. We are yet to study the order," said M&M and Honda spokespersons. The spokesperson for Tata Motors, the company that has received a sledgehammer blow with the maximum fine, said it will respond after studying the order. The CCI appears to have clubbed JLR revenues with Tata Motors while arriving at the penalty. 
Given the way penalty has been calculated on Tata Motors, the method of computation looks flawed, said auto analyst Basudep Banerjee. Auto stock may see gap down opening on Tuesday due to negative sentiment. Honda Siel, Volkswagen India, Fiat India, BMW India, Ford India, General Motors, Hindustan Motors, Mercedes - Benz, Nissan Motors, Skoda Auto India and Toyota Kirloskar are the other companies on whom fines have been slapped. 
Read complete story at Economic Times.

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