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Tata Motors Ltd is seeking legal counsel against the probe ordered by the Competition Commission of India (CCI) for alleged abuse of its dominant position with respect to dealership agreements.
“We have learnt that the Competition Commission of India (CCI) has passed an order directing the Director-General, CCI to initiate investigation against Tata Motors Limited’s (TML) commercial vehicles business in India. We understand that the CCI has passed a prima facie order and has not made any final or binding observations with regard to the allegations levelled against TML. TML is currently reviewing the copy of the order available in the public domain and will consult its legal counsels to take necessary steps.”, said TML in a statement.
Business model
According to the order released by the CCI, one of the dealers alleged that every authorised dealership is obligated to raise/finance loans from banks and or Non Banking Financial Companies such as Tata Capital and Tata Motors Finance. “Further, to sustain and retain the market share, Tata’s business model encompasses both manufacturing and financing of consumer vehicles. The Informant has averred that such a model/ arrangement between the operating parties is abusive, anti-competitive and detrimental to the financial health of authorised dealers,” said the informant in the CCI order.
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