China antitrust regulator fines Volkswagen, Chrysler

September 11, 2014, 7:07 PM UTC
This picture taken on July 6, 2014 shows Chinese auto workers on the assembly line at the FAW-Volkswagen plant in Chengdu, southwest China's Sichuan province, during the visit of German Chancellor Angela Merkel. The plant, the second one in China, produced its first car in October 2011 and is now operating in full capacity with an expected production of 600,000 vehicles in 2014.. AFP PHOTO/GOH CHAI HIN (Photo credit should read GOH CHAI HIN/AFP/Getty Images)
GOH CHAI HIN/AFP--Getty Images

* Volkswagen JV, Chrysler unit fined total $46 mln

* Penalties raise prospects of fines for other car makers

* Auto sector under particular scrutiny by regulators

(Adds comment from Audi CEO)

SHANGHAI, Sept 11 (Reuters) – China’s anti-monopoly regulator on Thursday announced its first-ever punishment of foreign carmakers for price-fixing, fining a Chinese venture of Volkswagen AG and the China sales unit of Fiat’s Chrysler a combined $46 million.

The penalties raised the possibility of similar fines being levied against other global players such as Daimler’s Mercedes-Benz and Tata Motor Ltd’s Jaguar Land Rover, which are being probed for possible anti-competitive behaviour.

The price regulator in Hubei province said it would fine the sales unit of Volkswagen’s joint venture FAW-Volkswagen Automobile Co Ltd 249 million yuan ($40.6 mln) for fixing Audi prices.

Chrysler’s China sales unit will be fined 32 million yuan for operating a price monopoly, anti-trust regulator the National Development and Reform Commission (NDRC) NDRC Shanghai branch said. Separately, three Chrysler dealers in Shanghai and eight Audi dealers in Hubei would also be fined.

While many industries in China have come under the spotlight as the authorities intensify efforts to bring companies into compliance with an anti-monopoly law enacted in 2008, the auto sector has been under particular scrutiny amid accusations by state media that global car makers are overcharging consumers.

The penalty is severe, and companies can be fined up to 10 percent of their annual China revenues for breaking the anti-monopoly law. But the FAW-Volkswagen penalty represents just 6 percent of Audi’s turnover in Hubei, according to a person with knowledge of matter.

Last month, China, the world’s largest car market, fined 12 Japanese auto parts makers a record 1.235 billion yuan for manipulating prices.


The anti-trust investigations are causing concern and in August the European Union Chamber of Commerce in China said Beijing was using strong-arm tactics and appeared to be unfairly targeting foreign firms.

Foreign automakers are obliged to form joint ventures in China. Volkswagen has a 30 percent stake in FAW-Volkswagen, Volkswagen’s premium auto brand Audi has 10 percent and Chinese state-owned group FAW owns the rest.

Punishment for Chrysler and Audi has been widely expected as the NDRC previously said it had concluded the two carmakers had broken the anti-monopoly law.

Audi had already said its sales arm had violated “part” of the country’s anti-monopoly laws.

“We have been optimising the management processes in the sales and dealership structure,” Audi China said in a statement on Thursday.

“Audi and FAW-Volkswagen attach great importance that all applicable antitrust and competition laws are adhered to.”

Audi will accept the fine, its chief executive, Ruper Stadler, told, an online German car magazine.

“I am convinced that we understand China so well that we will be able to do profitable business there in the next few years,” he was quoted as saying by the website.

Officials at Chrysler in China could not be reached for comment.

(1 US dollar = 6.1310 Chinese yuan)

(Reporting by Samuel Shen and Kazunori Takada; Additional reporting by Victoria Bryan in Berlin, Germany; Editing by Alex Richardson and Mark Potter)