Audi ready to accept punishment

GERMAN luxury car brand Audi will accept punishment from Chinese authorities for breaching anti-monopoly laws in the world’s largest auto market, it said yesterday.

An investigation by Chinese authorities found that an Audi dealer network had “violated national anti-monopoly laws,” the brand’s China arm said in a statement, adding that the Audi joint venture involved had “closely cooperated with the investigation and will accept a penalty.”

China has recently launched probes into alleged wrongdoings by a host of foreign firms in multiple different fields, among them pharmaceuticals, technology and baby milk.

The statement came after China’s National Development and Reform Commission, which polices violations of “anti-monopoly” law, said it had been investigating the auto sector — dominated by foreign companies and their joint ventures — for more than two years.

Last week, it pledged to punish Audi, and Chrysler of the US, now part of Italy’s Fiat group, without stating what penalties they would receive.

China considers using a dominant market position to set prices as a form of monopoly. Violators’ “illegal gains” can be seized, and they can be fined up to 10 percent of their sales revenue in the previous year.

Audi is owned by Volkswagen, which set up a joint venture with Chinese auto giant FAW.

“Management processes in the sales and dealership structure are getting improved to prevent similar incidents in the future,” the Audi China statement added.

It did not explicitly state that Audi acknowledged any wrongdoing. But it added: “Audi and FAW-Volkswagen attach great importance that all applicable anti-trust and competition laws are adhered to.”

China has become critically vital to foreign carmakers, given the size of the market and weak sales elsewhere in the world.

China’s full-year auto sales hit 21.98 million vehicles last year, when a recovery in Japanese brands offset the impact of slowing economic growth.

The inquiry into carmarkers comes as the State Administration for Industry and Commerce, which also enforces the anti-monopoly law, investigates US software giant Microsoft for allegedly operating a monopoly.