Japanese car makers cut parts prices in China after anti-monopoly probe

A worker walks in front the Toyota Motor Corp stage prior to the opening of the 15th Shanghai International Automobile Industry Exhibition in Shanghai
by Samuel Shen and Pete Sweeney

Japan’s Toyota, Honda and Nissan became the latest foreign carmakers to respond to China’s anti-monopoly investigation into the auto industry, as the probe’s impact extends beyond foreign luxury auto brands.

GAC Toyota Motor Co, Toyota’s joint venture with China’s GAC Group, and Guangqi Honda Automobile Co, Honda’s venture with GAC, both said late on Friday they would cut spare part prices due to the investigation.

Nissan’s joint venture with China’s Dongfeng Motor Group Co said it paid close attention to the regulator’s suggestions and was actively studying improvements.

The moves came on the heels of price cuts by foreign luxury brands including BMW, Mercedes-Benz, Audi, Chrysler and Jaguar Land Rover over the past month, as China’s price regulator, the National Development and Reform Commission (NDRC), steps up scrutiny of the industry.

China has also wielded its anti-monopoly law against other industries, including milk power and software. It targeted multinationals Mead Johnson Nutrition Co and Danone SA, which the regulator slapped with hefty fines, as well as U.S. chipmaker Qualcomm Inc, which faces the prospect of a $1 billion fine.

China’s anti-trust investigations target monopolistic practices in general and aim to promote fair competition and protect consumer interests, China’s Ministry of Commerce spokesman Shen Danyang said in a statement posted on the Ministry’s website.

Both domestic and foreign firms must bear the due liabilities if they break the law, Shen said.

Industry experts say automakers have too much leverage over car dealers and auto part suppliers, enabling them to control prices, considered as a violation of China’s anti-trust laws.

China, the world’s biggest auto market, is dominated by foreign brands.