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China fines Chrysler $5 million

by David Zatz on

In an ironic move, city of Shanghai, China, has fined Chrysler $5.2 million for “monopoly” practices.

China does not allow foreign manufacturers to own local factories, but levies punishing import taxes on foreign-built cars. The country does not face such barriers when exporting to the United States, instead enjoying Most Favored Nation status with Congress’ repeat approval.

Jeep-Wrangler-Beijing

Chrysler, which has an infinitesimal market share in China due to Mercedes’ takeover of Beijing Jeep, was accused of setting minimum prices for vehicles sold in Shanghai.  Three dealerships were also fined a total of $343,000 for price-fixing on service work.

China, which is officially communist, claimed that this was a violation of free market principles, according to the Associated Press. A spokesman for the country said that enforcement is even-handed, but companies said that they were not allowed to see evidence or bring lawyers to meetings.

Audi was also fined, for $40.5 million; eight Audi distributors were fined a total of $5 million. Mercedes was found to have violated the law but was not penalized. Mercedes and Audi cut parts prices and Chrysler cut imported-car prices.

Other companies under attack include Microsoft and Qualcomm.

Full report on Detroit News.

David Zatz founded Allpar in 1998 (based on a site he had begun in 1993-94), after years of writing reviews for retail trades. He has been quoted by the New York Times, the Daily Telegraph, the Detroit News, and USA Today. Before making Allpar a full-time career, he was a consultant in organizational psychology. You can reach him by using our contact form (much preferred) or by calling (313) 766-2304


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