Hyundai Receives Rs. 87 Crore Penalty for Unfair Conduct

Hyundai Grand i10

Hyundai has been accused of offering unfair discounts beyond the permissible range; penalty amount translates to 0.3% of average turnover

Hyundai India has been slapped with a fine amount of Rs. 87 crore by the Competition Commission of India due to the South Korean auto major’s anti-competitive behaviour. It has been accused of offering unfair discounts beyond permissible range. The penalty amount turns out to be around 0.3% of the auto manufacturer’s average turnover of last three years.

Hyundai India has been directed to cease and not to offer such discounts again in future. The Competition Commission of India says that such unfair conduct pertains to and emanates out of sale of motor vehicles. Hence, for the purposes of determining the relevant turnover for its infringement, revenue from sale of motor vehicles alone has to be taken into account.

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CCI also says that, the decision has been taken through discount control and penalty mechanisms for non-compliance of the discount scheme. However, the car manufacturer has issued a statement saying that it is really surprised with this order. The company also said that it is studying the order in detail and will take necessary actions to challenge it at appropriate level to protect the interest of its customers and partners. It claims that everything has been done abiding the law of India.

The Competition Commission of India also says that India’s second largest passenger car manufacturer violated the fair competition law through arrangements that resulted into resale price maintenance and by mandating its dealers to use particular lubricants or oils. It has been also accused of penalizing the dealerships for using non-recommended lubricants and oils.

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Hyundai has several popular models in the highly competitive Indian market across various segments. It is not clear on which cars Hyundai offered such unfair discounts. But, it can be assumed that models like Eon, Grand i10, Elite i20 and Creta could be involved in the alleged unfair practice, as these vehicles are the most popular models from the brand.

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