China investigates carmakers over pricing

A Chinese automotive association is collecting data on the price of all foreign cars sold in the country for a government agency that has fined companies for price-fixing in sectors ranging from milk powder to jewellery, officials at the industry body said.

The China Automobile Dealers Association (CADA) has been doing the research for the National Development and Reform Commission (NDRC) since last year, said Luo Lei, deputy secretary-general of the association.

Luo said the NDRC was investigating whether carmakers were setting a minimum retail price for dealers in China, which lawyers said could contravene the country’s 2008 anti-monopoly law. The world’s largest car market is a key source of revenue for many foreign companies and such scrutiny would be unwelcome.

The NDRC, which is responsible for enforcing anti-trust rules on pricing, declined to comment, but lawyers said it was common for the commission to seek information from industry bodies before launching a formal investigation.

Executives at foreign carmakers said they were not aware of any research being conducted by CADA, which represents car dealers across China, or an investigation by the NDRC.

Luo said the association was looking at imported cars along with vehicles produced by foreign companies in association with local partners. “We’re looking at all brands, including those imported and those made by domestic JVs,” Luo said in a telephone interview, declining to say exactly when CADA began its research, when it might finish or why it had taken so long.

“We see there’s a big difference in the prices of imported cars in China and their overseas prices. We’re looking into that.”

Another CADA official, who declined to be identified because she was not allowed to speak to the media, said the association was collecting data on overseas and domestic prices of different brands of cars as well as information on profit margins, costs for carmakers and various taxes levied on vehicles.