BMW to reduce prices amid antitrust probe

Bayerische Motoren Werke AG joined Daimler AG's Mercedes-Benz and Volkswagen AG's Audi in reducing prices of spare parts in China amid an antitrust investigation into the vehicle industry.

BMW will cut prices on more than 2,000 components by an average of 20 percent starting next Monday, the Germany-based automaker said in an e-mailed statement on Thursday. The company also said its authorized dealerships will set up more outlets in large cities including Beijing and Shanghai to sell original parts to independent workshops to help provide consumers more choice.

China, home to the world's largest vehicle market, is stepping up scrutiny over how much foreign automakers charge for vehicles and spare parts. The government began looking into possible antitrust violations in the industry at the end of 2011 after State media accused carmakers of inflating prices and overcharging consumers.

"We haven't seen this being done by anyone else. They're the first," said Yang Song, an auto analyst at Barclays Capital Inc in Hong Kong.

If the National Development and Reform Commission "really wants all the spares to be sold to independent workshops, then they really need to change the regulation instead of calling for price cuts."

In the first seven months of the year, BMW cut prices on more than 3,300 types of original parts by an average of 15 percent, with 108 products cut by 20 percent to 50 percent, according to the statement. To widen access to original components, BMW's dealers have set up outlets in Guangzhou and Hangzhou to sell the parts to independent repair workshops, with more planned for major cities, the company said.

"Recently, NDRC's Price Supervision and Anti-Monopoly Bureau expressed great concerns over existing problems in the auto industry and after-sales service sector," BMW said in the statement. "BMW has been paying close attention and in response, is making the effort to bring down wholesale prices and promoting the flow of original parts."

Toyota Motor Corp's Lexus unit is waiting to see the outcome of its talks with the NDRC before deciding on its actions, said Tokuo Fukuichi, president of Lexus International. The company's China unit is cooperating fully with the regulator, he said on Friday in Japan.

Antitrust officials in eastern Jiangsu province have begun investigations of Mercedes-Benz dealers in five cities including Suzhou and Wuxi, while Mercedes-Benz's Shanghai office was raided by local NDRC officials, said NDRC spokesman Li Pumin.

(China Daily 08/09/2014 page7)