The official Xinhua News Agency reported that the luxury car unit of Daimler AG – Mercedes-Benz – has been found guilty by Chinese regulatory authorities of manipulating prices of after-sales services.
The decision followed an investigation which proved that Daimler AGs Mercedes-Benz luxury vehicles division abused pricing for after-sales services and supplies of replacement parts in China.
No possible penalties were mentioned in the regulatory report. Still, according to a 2008 anti-monopoly law, the National Development and Reform Commission (NDRC) is allowed to impose fines that amount to up to 10% of the companys revenues for the previous fiscal year.
Recently, other foreign auto manufacturers such as Audi and BMW have also been scrutinized by Chinese regulators. The National Development and Reform Commission said earlier in August that it intends to fine Volkswagen AGs Audi brand as well as Fiat SpAs Chrysler for monopoly practices. According to a Chinese media, a fine of about 250 million yuan (40.7 million dollars) will be imposed on Audi.
In July, the Jiangsu Province Price Bureau started an investigation which found evidence of anti-competitive practices and manipulation of spare parts prices after raiding Mercedes-Benz dealerships.
As reported by BBC, the head of the anti-monopoly division of Jiangsu Zhou Gao said for Xinhua: “Mercedes-Benz is a typical case of vertical price fixing – that is, the use of its dominant position in after-market parts to maintain price controls.”
One of the spokesmen of Daimler AG confirmed the companys statement from August 5th that it was assisting Chinese regulatory authorities with the investigation.
Daimler AG added 1.96% to trade at 60.88 euros per share at 9:12 GMT, marking a one year change of +9.97%. The company is valued at 63.88 billion euros. According to the Financial Times, the 30 analysts offering 12-month price targets for Daimler AG have a median target of 75.00 euros, with a high estimate of 86.00 euros and a low estimate of 57.90 euros. The median estimate represents a 25.61% increase from the previous close of 59.71 euros.
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