Carmakers are being investigated for anti-competitive practices by the Competition Commission of India (CCI). This information was given in the Lok Sabha by R.P.N. Singh, Minister of State for Corporate Affairs.

The probe is about the practices followed by car companies in approving component vendors and appointment of dealerships, official sources said.

The Government agency is also investigating the spare parts distribution model of carmakers such as Honda and Toyota, where the customer is forced to buy new components only from the dealership and not the open market, where it is usually cheaper. However, some companies, such as Maruti Suzuki and Hyundai, do not restrict spare parts to dealers.

“If you as a consumer go to get your car serviced, you are expected to buy only company provided spare parts. Consumers, in this case, do not have any choice in the matter,” a CCI official said.

He added that such conditions are against fair-trade practices and such actions by carmakers were an abuse of dominance.

Another industry official said that nearly all carmakers had received an intimation of such an enquiry by the competition panel almost a year back.

(This article was published on August 9, 2012)
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