Maruti Suzuki slapped with Rs 200 crores fine for not offering discounts

Aug 23, 2021 1 min read
Maruti Suzuki slapped with Rs 200 crores fine for not offering discounts

CCI has found that Maruti Suzuki is controlling dealer discounts on its cars and not allowing car dealers to offer bigger discounts.

India's antitrust authority penalized the nation's biggest carmaker, Maruti Suzuki, Rs 200 crore ($27 million), for its anticompetitive activities related to the discounts by automobile dealers.

In 2019, the Competition Commission of India (CCI) began investigating claiming Maruti is forcing its dealers to curtail their discounts, thereby suppressing competition between the dealers and harming consumers who could have benefited from reduced costs if dealers are freely operating. It was found that Maruti prohibited retailers from providing customers additional discounts

Following an inquiry started in July 2019, the CCI has requested that Maruti should stop such activity and directed the business to pay the fine within 60 days. Maruti is a major proprietor of Japan's Suzuki Motor Corp, which sells a lot of cars in India.

A corporate spokesman for Maruti Suzuki India commented on the CCI report, "The report was issued by the Competition Commission of India in its Order of 23 August 2021. MSIL has always been and will continue to act in the best interests of consumers."

Maruti assured the regulators that it did not impose a discount control policy on dealers. The dealers have the freedom to offer their consumers any deals they wanted. The regulator revealed the portions of multiple emails that were exchanged between dealers and officials of the Maruti, making clear that Maruti and not its dealers have authority over the Discount Control Policy.

The order by the CCI stated that Maruti not only forced its dealers to engage in such activities but also imposed fines on those not complying with its orders. In imposing the Rs 200 crore penalty, the regulator indicated that it has considered the post-pandemic phase of the automobile sector recovery.

This particular event can be considered as a blow to the biggest car manufacturer of India. The company will be forced to change its policies related to dealer discounts. This event can also affect the reputation of the company in India.

Great! Next, complete checkout for full access to CarInfo.
Welcome back! You've successfully signed in.
You've successfully subscribed to CarInfo.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info has been updated.
Your billing was not updated.