Ford, Nissan, Toyota penalized for unfair trade practice in spare parts; to pay 2% of their turnover as a consequence
The Competition Appellate Tribunal (COMPAT) has penalized the automakers like Ford, Nissan and Toyota for unfair trade practices in spare parts. Now these three companies have to pay 2% of their turnover in the spare parts market as a result. Also, COMPAT has directed to create a level playing field in after sales service by the automakers.
The three auto manufacturers have been directed to remove all restriction on supply of spare parts to the independent repairers. Also, they have been asked to provide MRPs on spare parts on company websites. Alongside this mandate, COMPAT wants the Ministry of Road & Transport to ensure standardization of the auto parts across the country.
Experts believe, this judgement by COMPAT will help in bringing transparency, accessibility and fairness in the automobile spare parts industry. It will also ensure greater and fairer competition in the market and promote the customer’s interests as well.
In 2014, CCI found 14 auto manufacturers present in the country guilty of anti-competitive practice in the spare parts market. Alongside several foreign automakers, the list included the Indian brands like Maruti Suzuki, Mahindra & Mahindra and Tata Motors as well. These companies were slapped by a Rs. 2,545 crore fine. Nissan, Ford and Toyota Kirloskar Motors appealed against the fine at the COMPAT. Other companies appealed at the High Court.
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The case actually goes way back to 2011, when a petition was filed at CCI alleging that automakers operate/authorize/regulate/control the operations of various authorized workshops and service centres selling automobile spare parts.
Source: ET Auto