The Competition Commission of India has slapped a penalty of Rs 420 crore on Hyundai Motor India Limited for unfair trade practices. There were two other carmakers in the dock too, namely Mahindra Reva Electric Vehicles Pvt Ltd, and Premier Ltd for violation of competitive practices. The latter two, however, were spared the fine according to an official CCI statement.
CCI found Hyundai Motor India Ltd (HMIL) guilty of violating the competitive practices, not making its genuine spare parts freely available in the open market. This forced the customers to get their cars compulsorily repaired only at the Authorized Hyundai services stations, and not at third party garages, which turn out cheaper for car owners, but take away some share of the automaker’s revenues.
The fine was calculated at 2% of the HMIL’s average turnover. The company has been asked to pay the fine within a period of 60 days, along with a notice to cease and desist from such practices.
“The car company was found to be indulging in practices resulting in denial of market access to independent repairers as the latter were debilitated to provide services in the aftermarket for repair and maintenance of cars for want of genuine spare parts,” a CCI statement said.
“The car companies were found to be indulging in practices resulting in denial of market access to independent repairers as the latter were debilitated to provide services in the aftermarket for repair and maintenance of cars for want of genuine spare parts. Further, these car companies were also found to be using their dominant position in the market for spare parts and diagnostic tools to protect their market for repair services, thereby distorting fair competition” the CCI statement said.
In the case of Reva, the Commission, in its investigation, observed that the company’s spare parts were, to some extent, available over the counter,” it said.
“Considering the mitigating factors that worked in favour of Reva and Premier, the two car companies were absolved from paying monetary penalty,” the statement added.