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Audi to accept Chinese punishment

Investigation: The Chinese government has wrapped Audi over the knuckles for allegedly breaching anti-monopoly laws.

Chinese authorities accuse foreign car-makers of breaching anti-monopoly laws

14 Aug 2014

AUDI says it will accept punishment after Chinese authorities accused the German car-maker of violating the country’s anti-monopoly laws.

China’s National Development and Reform Commission (NDRC) said it would punish several car-makers including Audi and Chrysler for alleged wrongdoings following a two-year investigation into its auto industry.

The penalties have not been disclosed by the NDRC.

The Chinese government has been scrutinising foreign firms in recent times and considers any company using its market dominance as a way to set higher prices a breach of the country’s anti-trust laws.

Following the investigation in July, Audi, BMW, Mercedes-Benz, Jaguar Land Rover, Chrysler, Toyota and Honda slashed the prices of their vehicles and spare parts.

American publication Autonews has reported that an insider from a large, prestige car company operating in China said the government is cracking down on foreign car-makers after state broadcaster China Central Television claimed imported cars cost more in China than other countries.

Audi’s dealer arm in China, FAW-Volkswagen Sales – a joint venture between domestic car-maker FAW holding (60 per cent) and Volkswagen AG (40 per cent) – is the entity under investigation.

While Audi is not admitting to breaking the law, the statement said the company is willing to be punished.

“According to investigations of the Hubei Provincial Price Bureau, partial practices in the dealership network of the FAW-Volkswagen Sales Co., Audi Sales Division in Hubei province have violated national Anti-Monopoly laws,” reads the statement by Audi.

“The Audi Joint Venture FAW-Volkswagen has closely cooperated with the investigation and will accept a penalty. Management processes in the sales and dealership structure are getting improved to prevent similar incidents in the future. Audi and FAW-Volkswagen attach great importance that all applicable antitrust and competition laws are adhered to.”

Last year 411,730 Audis were sold in China and according to the German brand's 2013 annual financial statement, FAW-Volkswagen’s profit was €4 billion ($A5.75 billion).

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