China Completes Antitrust Probe of Japanese Auto Companies

Aug 06, 2014 4:45 am ET

(Updates with Honda comment in seventh paragraph.)

Aug. 6 (Bloomberg) -- China, home to the world’s largest auto market, completed an antitrust investigation into 12 Japanese companies and will punish violators, the nation’s top economic planner said.

The National Development and Reform Commission will announce the details of its investigation into pricing practices for auto components and bearings as well as the actions it plans to take in the near future, according to spokesman Li Pumin, who declined to name the companies.

“The purpose is to maintain the competitive order of the auto market and protect the legal interests of the consumer,” Li said, according to a transcript of today’s briefing in Beijing posted on the agency’s website.

China has stepped up scrutiny of pricing practices as the country becomes an increasingly important source of profit for foreign automakers. The state media have criticized the companies for selling imported cars at higher prices than in other markets and overcharging for spare parts.

“The automakers will resist as long as possible,” Yale Zhang, managing director of Autoforesight Shanghai Co., said by phone. “Who wants to give up 100 percent to 150 percent profit margins? Here, selling one car is equivalent to selling 10 cars in the U.S.”

Antitrust Probe

Nissan Motor Co.’s Beijing-based spokeswoman Huo Jing said Nissan and its Infiniti unit haven’t been investigated as of yesterday. Denso Corp. spokesman Sadayoshi Yokoyama said the company can’t comment on the investigation or related issues.

Toyota Motor Corp. can’t confirm whether authorities have conducted an investigation, spokeswoman Kayo Doi said. Mazda Motor Corp. and Honda Motor Co. said they were unaware of being investigated. Fuji Heavy Industries Ltd. couldn’t immediately comment in relation to the NDRC comments.

Antitrust officials in eastern Jiangsu province have begun investigations of Mercedes-Benz dealers in five cities including Suzhou and Wuxi, while Mercedes-Benz’s Shanghai office was raided by local NDRC officials, according to Li. The government will also soon punish Chrysler Group LLC and Volkswagen AG’s Audi for engaging in monopolistic actions, he said.

Daimler AG, which owns Mercedes-Benz, confirmed the government investigation in an e-mail yesterday. Chrysler’s Chinese sales unit said in a statement today that it’s extending “full cooperation” to NDRC investigators, declining further comment.

Audi confirmed in an e-mailed statement that the Hubei Province Price Bureau is investigating the dealership network of its Chinese joint-venture sales unit in the province.