Automakers lower prices following monopoly concerns

Covering both smart cars and Mercedes-Benz models, including the A-, B-, C-, E-, GLK-, M-, R-, and S-Class, the cost of maintenance will be cut by 20 percent on average and the reduction for some specific models could be as much as 50 percent.

When the company was contacted by China Daily on Monday, it had no comment to make on the relationship between the price cut and NDRC's monopoly investigation. It said, "Mercedes has an ongoing relationship, a constructive one, with NDRC."

Marc-Oliver Nandy, executive vice-president of After-Sales at Beijing Mercedes-Benz Sales Service Co Ltd, said earlier that with the Menu, maintenance of a Mercedes-Benz becomes transparent regarding contents and price. "We offer our customers an enhanced experience at a competitive, fair price point."

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Karsten Engel, president and chief executive officer of BMW China, said on Monday that the company has not been involved in any antitrust investigation by NDRC.

"BMW's parts and after-sales pricing is transparent in China," he said.

According to Engel, BMW is "the first and the only one" in the automobile industry since 2006 that not only permits but also encourages its authorized dealer organization to sell genuine BMW parts to independent repair workshops, which "we call the fourth-level business".

To better benefit its customers in after-sales, Engel said, "BMW also permits our dealerships to direct purchase vehicle parts from OES (original equipment supplier), not as our competitors' way of requiring the dealers to source the parts only from OEMs (original equipment manufacturer)."

However, he said BMW does not encourage the parts supply directly from OES.

An insider of Japanese automaker Nissan's luxury brand Infiniti also said on Monday that the company "has not been contacted by NDRC", and the company's pricing has already been competitive in the market.

China's Anti-monopoly Law, which took effect in 2008, allows industry regulators to impose fines between 1 and 10 percent of the affected company's revenues in the previous year.

"The monopoly status is quite common in automobile industry, so that the investigation is necessary to curb it," said auto analyst Zhang Zhiyong.

"The monopoly behaviors vary from limiting dealers' price bottom, regulating dealers' sales in different regions to the restriction of parts-sourcing only from OEMs and so on," said Luo Lei, deputy secretary-general of the China Automobile Dealers Association.

"The more than 20 percent annual growth in China's luxury vehicle segment in recent years helped support such activities by automakers," he added. "And the investigation is expected to regulate and deter the sector."

REACTIONS

Jaguar Land Rover

Effective on Aug 1, the suggested retail prices of the Range Rover 5.0 V8, Ranger Rover Sports 5.0 V8 and Jaguar F-Type Cabriolet will be reduced by an average of 200,000 yuan per unit.

Mercedes-Benz

Effective on July 1, the cost of maintenance covering both smart cars and Mercedes-Benz models will be cut by 20 on average. And the reduction for some specific models could reach 50 percent.

Audi

Effective on Aug 1, the prices of locally produced models' spare parts will be lowered by up to 38 percent.