Mercedes latest to be indicted in China’s anti-monopoly drive

Carmaker Mercedes-Benz has been found guilty of manipulating the price of spare parts sold in China following an investigation by the authorities.

The official Xinhua News Agency reported today that regulators said the luxury unit of Germany's Daimler Ag abused its control over supplies of replacement parts.

The report made no mention of the likely penalty, but China's 2008 anti-monopoly law allows the National Development and Reform Commission (NDRC), the country's anti-trust regulator, to impose fines of up to 10 per cent of a company's China revenues for the previous year.

BMW, Audi and Chrysler are also facing sanctions as part of the anti-monopoly crackdown.

Overseas companies in the pharmaceuticals, technology and food sector have also faced investigation in recent months.

Last week, the European Chamber of Commerce in China said its members were "increasingly considering the question" of whether foreign companies were being disproportionately targeted.

According to the Xinhua report, investigators from the anti-monopoly bureau of the eastern province of Jiangsu found prices were so high that purchasing the parts used to make one Mercedes C-class car would cost the equivalent of buying 12 vehicles.

"Mercedes-Benz is a typical case of vertical price fixing - that is, the use of its dominant position in after-market parts to maintain price controls," said Zhou Gao, chief of the Jiangsu's anti-monopoly unit, according to Xinhua.

A Daimler spokesperson said on Monday that the company was "assisting" Chinese authorities, but was "unable to comment further on what is still an on-going matter".

Earlier this month, the German luxury auto maker said it would cut prices of over 10,000 spare parts by 15 per cent on average. The announcement comes less than a month after its announcement of a sweeping cut in prices for repair and maintenance services (See: Mercedes Benz to cut prices of over 10,000 spare parts in China).

Toyota has said that its Lexus division is under scrutiny, and General Motors has said that its main China joint venture has responded to requests by regulators for information.

Other companies under investigation include Qualcomm, a US maker of microchips used in mobile phones, and software giant Microsoft.