Japanese car makers cut parts prices in China after anti-monopoly probe

SHANGHAI Sat Aug 9, 2014 11:18am EDT

A worker walks in front the Toyota Motor Corp stage prior to the opening of the 15th Shanghai International Automobile Industry Exhibition in Shanghai April 19, 2013.  REUTERS/Carlos Barria

A worker walks in front the Toyota Motor Corp stage prior to the opening of the 15th Shanghai International Automobile Industry Exhibition in Shanghai April 19, 2013.

Credit: Reuters/Carlos Barria

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SHANGHAI (Reuters) - Japan's Toyota, Honda and Nissan became the latest foreign carmakers to respond to China’s anti-monopoly investigation into the auto industry, as the probe’s impact extends beyond foreign luxury auto brands.

GAC Toyota Motor Co, Toyota's joint venture with China's GAC Group, and Guangqi Honda Automobile Co, Honda's venture with GAC, both said late on Friday they would cut spare part prices due to the investigation.

Nissan's joint venture with China's Dongfeng Motor Group Co said it paid close attention to the regulator's suggestions and was actively studying improvements.

The moves came on the heels of price cuts by foreign luxury brands including BMW, Mercedes-Benz, Audi, Chrysler and Jaguar Land Rover over the past month, as China's price regulator, the National Development and Reform Commission (NDRC), steps up scrutiny of the industry.

China has also wielded its anti-monopoly law against other industries, including milk power and software. It targeted multinationals Mead Johnson Nutrition Co and Danone SA, which the regulator slapped with hefty fines, as well as U.S. chipmaker Qualcomm Inc, which faces the prospect of a $1 billion fine.

China's anti-trust investigations target monopolistic practices in general and aim to promote fair competition and protect consumer interests, China's Ministry of Commerce spokesman Shen Danyang said in a statement posted on the Ministry's website.

Both domestic and foreign firms must bear the due liabilities if they break the law, Shen said.

Industry experts say automakers have too much leverage over car dealers and auto part suppliers, enabling them to control prices, considered as a violation of China's anti-trust laws.

China, the world’s biggest auto market, is dominated by foreign brands.

(Reporting by Samuel Shen and Pete Sweeney, editing by William Hardy)

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Comments (3)
nose2066 wrote:
This news story: “China’s anti-trust investigations target monopolistic practices in general and aim to promote fair competition and protect consumer interests…”

We need something like that over on this side of the Pacific Ocean. Most auto dealer car parts have huge mark-ups: A ten dollar turn signal flasher unit that you used to be able to easily install yourself, now is an “integrated flasher unit” that sells for nearly a hundred dollars and you spend another hundred or maybe two hundred dollars on installation by the dealer because the part is now hidden away underneath the dashboard.

A simple ten cent plastic part to clip mouldings to the side of the car sells for eight dollars at the auto dealer.

The Chinese are going to wind up with a real capitalist system, and we are going to have… ???

Aug 09, 2014 12:44pm EDT  --  Report as abuse
nose2066 wrote:
This news story: “China’s anti-trust investigations target monopolistic practices in general and aim to promote fair competition and protect consumer interests…”

We need something like that over on this side of the Pacific Ocean. Most auto dealer car parts have huge mark-ups: A ten dollar turn signal flasher unit that you used to be able to easily install yourself, now is an “integrated flasher unit” that sells for nearly a hundred dollars and you spend another hundred or maybe two hundred dollars on installation by the dealer because the part is now hidden away underneath the dashboard.

A simple ten cent plastic part to clip mouldings to the side of the car sells for eight dollars at the auto dealer.

The Chinese are going to wind up with a real capitalist system, and we are going to have… ???

Aug 09, 2014 12:46pm EDT  --  Report as abuse
gentalman wrote:
Dannon two lbs yogurt cost $3! Monopoly not only for auto parts but in almost everywhere.Particularly medicines.Look at the prices of OTC products like Itching cream,ear drops,eye drops,sleeping tablets!Can not count.

Aug 09, 2014 4:46pm EDT  --  Report as abuse
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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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