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Enquiry into Indian auto industry; malpractice in sale of spares.

India, March 1 -- Jadish Khattar, former MD of Maruti Suzuki has joined with the Competition Commission of India (CCI) in an enquiry against the anti-competitive practices of the Indian Auto Industry. The enquiry is looking into the restrictive practices of auto manufacturers in providing spare parts to independent dealers.

Khattar's firm Carnation, a multi brand auto solutions provider, made an application signed by him, with the intent to "protect public interest" and lead to better competition in the automobile aftermarket to "benefit of Indian consumers."

The CCI is inquiring into the alleged practice of 17 carmakers who sell spare parts at higher prices to consumers through their authorised dealers. CCI has said that the carmakers have been using their dominant market position to charge consumers exorbitantly.

A year-long detailed investigation by the CCI had charged almost every carmaker in India for alleged anti-competitive practices. The final report by the CCI states, "The prevailing practices have not allowed space for independent outlets to compete or survive in a closed market as companies restricted all component, diagnostic tools and technical manuals to their dealers, making them the sole option for customers for all service needs."

The involvement of Carnation along with CCI in the enquiry will allow them to stand up against industry biggies such as Maruti Suzuki, Hyundai, Mahindra & Mahindra, Tata Motors, Honda and Volkswagen - few of the companies being questioned.

In an interview with Economic times, Khattar said, "I've always believed that Indian customers have to be given a choice." He further added that all the major European carmakers provide parts to independent service centres in Europe.

In India a large number of car owners' shift to independent service vendors once warranty on their automobile expires. The non-availability/refusal to supply spare parts, technical information and diagnostic tools by the manufacturers leads to the use of spurious parts. This jeopardises safety, leads to increased emissions and loss of government revenue.

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Publication:Wheels Unplugged
Geographic Code:9INDI
Date:Mar 1, 2013
Words:352
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