More than 1,000 auto companies are probed

Updated: 2014-08-13 02:51

By LAN LAN and LI JIABAO (China Daily)

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The official said many domestic automakers are under scrutiny, but the problem here is not as obvious as that involving their international peers, partly due to their small market share.

Domestic-brand automakers accounted for less than 20 percent of China's auto sales in the first half of this year, the China Association of Automobile Manufacturers says.

The official said, "Our goal (with antitrust probes) is to ensure that Chinese consumers can enjoy high-quality auto and component services with prices as fair as in other markets."

He said the Chinese government aims to establish an environment in which enterprises can compete on an equal footing.

Jessica Su, antitrust scholar and Institute of American Studies associate professor at the Chinese Academy of Social Sciences, said the commission has strong evidence and a legal base to continue its investigations.

In the new-car and after-sales markets, the conduct of international automakers may have infringed the antitrust law, including price-fixing, territorial restrictions and customer restrictions , Su said.

In the after-sales car market, suspected conduct includes exclusive supply, exclusive purchase and excessive pricing of replacement parts, as well as restrictions on the supply of technical information needed for repair and maintenance, she said.

"Such behavior mainly comes from car manufacturers suspected of substantially impeding competition and harming consumer welfare," Su said.

"If similar conduct occurred in the United States, European Union, Japan, South Korea and other mature market economies, it would doubtless trigger antitrust investigations," she said.

The Anti Monopoly Law allows enterprises to claim efficiencies and other reasons to justify otherwise unlawful conduct, added Su.

Robin Bew, managing director of the Economist Intelligence Unit, said antitrust in China is a big issue that requires fairness and transparency.

"Big Western businesses are looking at what is happening in China and questioning whether the law is being applied evenly. That is always a worry for companies," Bew said.

"The areas where China needs foreign investment to bring in new know-how are sectors like education, healthcare and services," he added.

But Bew thinks that China will remain attractive for foreign investors.

"The China market is so big and it will be very difficult for any company to say that it won't be here in China. Most companies are now profitable in China and it is an important part of their revenue story worldwide, so they won't leave."

More than 1,000 auto companies are probed

More than 1,000 auto companies are probed

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