Hyundai India Penalised Rs. 420.26 Crore by the CCI

Hyundai Motor India Limited (HMIL) has been imposed a penalty of 420.26 crore by the Competition Commission of India (CCI) on 28 July 2015. The automaker has been accused of restricting the sale of spare parts of its vehicles in the open market. 14 other auto giants were penalised in August by the CCI for a sum totaling to 2,544.64 crore in the same case.Those companies included Honda Siel, Fiat, Volkswagen, BMW, Ford, General Motors, Hindustan Motors, M&M, Maruti Suzuki, Mercedes-Benz, Nissan Motors, Skoda, Tata Motors and Toyota Kirloskar Motors.

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Along with HMIL, Reva and Premier are also directed to 'cease and desist' for anti-competitive practices but luckily no fine was imposed. The CCI also said that there are certain mitigating factors which work in favour of Premier and Reva and therefore, the commission has decided not to impose any monetary penalty against the two. However, other directions for all the 17 companies would be applicable to these two as well. This completes the long investigation against 17 car makers by  the CCI.

CCI said that the companies had certain warranty conditions which binded the customers to only get the vehicles repaired by their own network of dealers. If the customers got their vehicle repaired by any third party dealer, the warranty would no longer stand. The companies had restricted the sale of their spare parts to the market by agreements or by understanding with their dealers resulting in exclusive distribution agreements and refusal to deal in accordance with fair competition norms.

Despite the claims of HMIL to be given a reduced penalty, CCI stands with its order to impose a penalty of Rs. 420.26 crore, which is two percent of the average annual turnover of three financial years of HMIL in India.