China has been a strong automotive market for global automakers. Going by global statistics, China is said to be the second largest premium vehicle market after USA which holds the top position. Given the current rate at which the car sales in China are rising, it would not be too long before it manages to outdo the US sales numbers.
Recently China has called for strong reinforcement of anti-monopoly law that has been effective since 2008. As per the policy, Audi and Chrysler have been found guilty in engaging into monopolistic practices like engaging into spare parts prices and inflated car prices. As per NDRC, the car prices were unusually higher even when vehicle cost covers additional costs like import tariffs and other taxes.
As per the law, violators can be fined for illegal gains with about 10% penalty on their sales revenue earned in the previous year. The amount can be pretty heavy, but Audi has agreed to abide by the law and pay the amount if fined. With the reinforcement of existing laws, companies like Mercedes Benz and Audi have scaled down the spare parts prices considerably, but sources state that this move may not hamper profit margins considerably. Audi's official statement in this regard states, “Management processes in the sales and dealership structure are getting improved to prevent similar incidents in the future.”
