Guilty! China Finds Mercedes at Fault for Price Gouging
No matter what car you drive, things inevitably go wrong, leaving you in need of a repair. Car buyers in China know the feeling, except when they go to get their Mercedes-Benz serviced, the repair costs might seem more like a new car purchase than a tune-up. According to Reuters, the German auto giant has just been found guilty of after-sales price gouging on parts and repairs by China’s National Development and Reform Commission (NDRC), the country’s antitrust regulator.
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China has been closely watching foreign automakers operating in the country for years in an effort to crack down on monopolies. So far, no penalties have been levied against Mercedes-Benz. However, the country’s 2008 anti-monopoly law permits the NDRC to impose fines of up to 10 percent of a company’s Chinese revenue for the previous year.
According to the original Xinhua news report, costs of replacing all the parts on a Mercedes C-Class in China could amount to more than 12 times the value of a new vehicle. Ouch. The same cost in the United States would be no more than 5 times, according to industry estimates.
Daimler hasn’t released any new comments on the issue, but echoed that the company was assisting authorities in the investigation.
Mercedes becomes the most recent automaker to be faulted by the NDRC. Earlier this month, it was reported that the NDRC would punish Audi – the country’s top-selling foreign luxury brand – to the tune of 250 million yuan, or $40.7 million.
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