The biggest carmaker in the Indian vehicle market Maruti Suzuki India Ltd got fined Rs. 200 crores by the Competition Commission of India (CCI) for anti-competitive actions involving the way it pressurised its authorised dealers to limit the discounts on cars. The company also used mystery shopping firms to confirm that no further discounts were provided to clients by its dealerships, according to the regulator’s research.
The Ministry of Corporate Affairs stated on Monday that the CCI passed the final order on Maruti Suzuki India for engaging in anti-competitive conduct of Resale Price Maintenence (RPM) in the passenger vehicle segment by implementing Discount Control Policy related to dealers. The CCI has ordered the automobile maker to “cease and desist” from anti-competitive dealer discount practices and pay the penalties within 60 days.
The investigation of the matter was started by CCI in 2019 and during the investigation, Maruti informed the regulator that it had no such policy and that dealers were free to give whatever discounts they wanted to offer their clients. However, the exchanged emails between Maruti and its dealers made it evident that the discount policy was controlled by the brand itself, not by the dealers.
By imposing such a policy, MSIL harmed the consumers from getting discounts on the vehicle purchase and also deprived the dealers to offer any discount or freebie without approval from the company. The CCI stated that Maruti Suzuki’s conduct, which had a significant detrimental effect on competition inside India, violated the requirements of the Competition Act.
In addition, an official from the company told that they have found the order from the commission and that the manufacturer has always worked within the laws of the country and will work legally further as well. Furthermore, the production of cars by the MSIL climbed by 58% till July however, it was lower as compared to previous years before the COVID-19 pandemic.
