GM’s China unit fined $29 mil­lion for price-fix­ing

China Daily (Hong Kong) - - FRONT PAGE - By WANG YANFEI and LI FUSHENG Con­tact the writ­ers at wangyan­fei@chi­nadaily.com.cn

The Chi­nese unit of Gen­eral Mo­tors has been fined 201 mil­lion yuan ($28.9 mil­lion) for in­fring­ing on the rights of con­sumers and its com­peti­tors through price-fix­ing since 2014, the Na­tional De­vel­op­ment and Re­form Com­mis­sion, China’s top eco­nomic reg­u­la­tor, said on Fri­day.

The amount was about 4 per­cent of SAIC GM’s sales in China last year. It was also the sec­ond time a US com­pany was fined this month as the na­tion strength­ens anti-monopoly reg­u­la­tion.

Ear­lier this month, the com­mis­sion im­posed a fine of 119 mil­lion yuan on the China unit of US com­pany Medtronic, a lead­ing sup­plier of high­end med­i­cal de­vices, for price-fix­ing.

Zhang Han­dong, di­rec­tor of the NDRC’s Price Su­per­vi­sion Bureau, said last week that no one should read too much into the tim­ing of the penalty de­ci­sions or the busi­nesses that were tar­geted, re­fer­ring to the Gen­eral Mo­tors case.

The penalty came af­ter US pres­i­dent-elect Don­ald Trump pledged to im­pose higher tar­iffs on Chi­nese ex­ports and af­ter a phone call between him and Tai­wan leader Tsai Ing­wen on Dec 2 strained Sino-US re­la­tions.

Xu Xinyu, a com­mis­sion of­fi­cial who was in charge of the GM case, said the in­ves­ti­ga­tion was launched in 2014, af­ter the com­mis­sion got clues from its price re­port plat­form about the com­pany’s monopoly prac­tices.

“The fine is fair,” said Xu. “We just aim to im­prove mar­ket or­der.”

As of Fri­day, the com­mis­sion had is­sued fines on au­tomak­ers to­tal­ing 2.25 bil­lion yuan since 2014.

John Zeng, man­ag­ing di­rec­tor of LMC Au­to­mo­tive Con­sult­ing (Shang­hai), said the fine it­self will not hurt the joint ven­ture’s profit too much, but will force SAIC GM and the in­dus­try to re­con­sider how to han­dle re­la­tions with deal­ers.

GM’s be­hav­ior is a com­mon prac­tice for au­tomak­ers set­ting min­i­mum prices for their cars, ac­cord­ing to Zeng.

The com­pany will pro­vide full sup­port to its joint ven­ture in China to en­sure that all ap­pro­pri­ate ac­tions and re­sponses are taken with re­spect to the mat­ter, GM China said af­ter it was fined.

A sales man­ager at an auto deal­er­ship in Shang­hai who re­quested anonymity said the com­pany had asked deal­ers to set a limit on the max­i­mum dis­count, ei­ther through emails or oral in­struc­tions.

The com­pany also tracked prices by mak­ing unan­nounced vis­its to stores, he said.

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