A fine of Rs. 420.26 crore has been imposed by Competition Commission of India (CCI) on Hyundai Motor India Limited (HMIL) for holding back spare parts and not distributing them in the open market. The company has a policy of terminating the warranty if any customer gets its vehicle serviced by a third party. This policy forces the customer to get their vehicles serviced from the authorised dealers of Hyundai only. The fine imposed on the company is 2% of its annual turnover for the last 3 years.
Two more companies Reva and Premier were directed to restrict similar policy to avoid any fines in future. These companies were let off after a warning only and were able to dodge any fine due to some factors which were in their favour. A total fine of around Rs. 2,500 crore was imposed on 14 car manufacturers last year after citing similar reasons. The companies were Honda Siel, General Motors, BMW, Mercedes-Benz, Fiat, Hindustan Motors, Mahindra & Mahindra, Maruti Suzuki, Tata Motors, Toyota Kirloskar Motors, Nissan Motors, Skoda, Ford and Volkswagen.
Hyundai appealed against the fine and requested CCI to reduce suggesting that its case is not similar to that of other 14 companies. But, the fair trade regulator argued that its case was not that different from others to reduce fine. The regulator was investigating the matter since a long time and finally reached the decision to penalise the company which was saved last year.
Hyundai has its products in all segments of cars in India and has remained in the top 3 car companies in terms of sales since a very long time. The manufacturer’s i20, Grand i10 and Xcent are one of the best selling cars in the country and enjoy a major chunk of market share in their respective segments. The regulator has been very strict while imposing fines and has not even spared European giants Mercedes-Benz and BMW.
