Mercedes guilty of price-fixing, say Chinese authorities

Mercedes car

Carmaker Mercedes-Benz has been found guilty of manipulating the price of spare parts following an investigation by the authorities in China.

The official Xinhua News Agency reports that regulators said the luxury unit of Germany's Daimler abused its control over supplies of replacement parts.

The report made no mention of the likely penalty.

BMW, Audi and Chrysler are also facing sanctions as part of an anti-monopoly crackdown by the authorities.

Overseas companies in the pharmaceuticals, technology and food sector have also faced investigation in recent months.

Last week, the European Chamber of Commerce in China said its members were "increasingly considering the question" of whether foreign companies were being disproportionately targeted.

Scrutiny

According to the Xinhua report, investigators from the anti-monopoly bureau of the eastern province of Jiangsu found prices were so high that purchasing the parts used to make one Mercedes C-class car would cost the equivalent of buying 12 vehicles.

"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," said Zhou Gao, chief of the Jiangsu's anti-monopoly unit, according to Xinhua.

A Daimler spokesperson said on Monday that the company was still "assisting" Chinese authorities, but was "unable to comment further on what is still an on-going matter".

Toyota has said that its Lexus division is under scrutiny, and General Motors has said that its main China joint venture has responded to requests by regulators for information.

Other companies under investigation include Qualcomm, a US maker of microchips used in mobile phones, and software giant Microsoft.

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Analysis: John Sudworth, BBC Shanghai

So are China's foreign car makers victims or villains?

On the one hand, just as in the other sectors (pharmaceuticals, technology and food) where multinationals have recently been tackled, there certainly seems to be room for price-cutting.

With the shadow of the investigations looming, the auto companies have all - in vain it now seems - been busy slashing the cost of spare parts, in some cases by up to 40%.

On the other hand it could be argued that foreign companies are simply being penalised for their own success.

Over the past decade or so Chinese consumers have shown an unquenchable thirst for luxury cars - price no object - and in a damning indictment of the country's domestic car industry, luxury means foreign.

The site of Tiananmen Square overflowing with Audis at the annual gathering of the country's parliament drives that point home.

The truth is, in many industries - the baby formula industry in particular - the monopoly that the foreign multinationals really exercise is a perceived monopoly on quality.

And as a result, to some extent, they've been able to charge what they like.

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