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China fines Volkswagen affiliate $40.5 mn for price-fixing
by Staff Writers
Beijing (AFP) Sept 11, 2014

China auto sales growth slows in August: group
Shanghai (AFP) Sept 11, 2014 - China's auto sales reached 1.72 million vehicles in August, a rise of just 4.0 percent compared with the same month a year ago, an industry group said Thursday.

In July sales had climbed 6.7 percent year-on-year to 1.62 million vehicles, previous figures showed.

For the first eight months of the year, the country's auto sales rose 7.7 percent to 15.02 million vehicles, the China Association of Automobile Manufacturers said in a statement.

China is critically important to foreign car manufacturers, which dominate the market, given massive demand from a growing middle class and weaker sales in other parts of the world such as Europe.

But the recent fining of several foreign auto firms for allegedly making use of a dominant market position to control prices, deemed to be in violation of China's anti-monopoly law, has taken some of the shine off its appeal.

Authorities on Thursday fined an affiliate of German automaker Volkswagen more than $40 million for price-fixing for cars and repair services in the central province of Hubei, according to a statement.

Separately, the government fined Chrysler of the United States -- which has merged with Italy's Fiat -- over $5 million for recommending prices to dealers in Shanghai, the official Xinhua news agency reported.

Still, foreign companies continue to record healthy sales.

US auto giant General Motors set a new record for August as its China sales surged 14.0 percent year-on-year to 280,178 vehicles, the company said.

Competitor Ford sold 77,506 vehicles, up 9.0 percent from the same month last year.

Full-year auto sales in China reached 21.98 million vehicles last year, when a recovery in Japanese brands offset the impact of slowing economic growth.

An affiliate of German carmaker Volkswagen has been fined more than $40.5 million for price-fixing in China, authorities said Thursday, the latest company to be punished under a sweeping anti-monopoly crackdown.

FAW-Volkswagen Sales Company, Ltd., a partnership between the Frankfurt-based firm and Chinese auto maker FAW, has been ordered to pay 248.58 million yuan in penalties for the offence, the Hubei Province Price Bureau said in a statement.

Beijing has over the past year launched a wide-ranging crackdown on alleged malpractice by domestic and foreign firms across diverse sectors, including pharmaceuticals, baby formula and technology.

Investigations found that the Volkswagen company had since 2012 organised 10 Audi dealers in the central province to fix prices for the cars and repair services, the statement said.

The move "deprived ... downstream operators of pricing rights, inflated sales prices for the cars and auto parts, eliminated and restricted the normal competitive order of the car and the spare parts (market) and damaged the rights and interests of consumers", it said.

"FAW-Volkswagen Sales Company, Ltd. presided over the process of organising, reaching and implementing the price monopoly agreement of the car and repair services and obviously played a leading and facilitating role," it added.

The fine was equivalent to six percent of the company's relevant sales revenue in the previous year, according to the statement.

Eight of the 10 dealers were fined between 110,000 yuan and 16.06 million yuan while the other two were exempted for reporting about the violation or minor offences, it said.

The sales company and the dealers lowered the price of imported Audi parts on August 1 and promised to "strictly comply with" Chinese anti-monopoly laws, according to the statement.

Separately, state media reported that Chrysler (China) Automobile Sales Co. will pay up to 31.7 million yuan in an antitrust fine imposed by Shanghai authorities for requiring dealers between 2012 and 2014 to maintain prices recommended by the manufacturer.

The official Xinhua news agency also reported that Shanghai pricing authorities said three of the company's dealerships in Shanghai would be slapped with antitrust fines totalling 2.14 million yuan for agreeing to set unified prices for car repair, spare parts and paint jobs for Chrysler, Jeep and Dodge vehicles.

The National Development and Reform Commission, one of three Chinese government bodies that investigates monopoly actions, said last month it was probing auto firms including Audi and Chrysler as well as 12 Japanese companies for possible violations.

It is the latest in a series of inquiries in various fields which have raised investor concerns about the business climate in China.

The government last month fined 10 of the Japanese auto parts firms more than $200 million in total for price-fixing, reportedly the biggest-ever such penalties, with one of the companies ordered to pay the highest amount of 290.4 million yuan.


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