CCI slaps Rs87 cr fine on Hyundai; carmaker ‘surprised’

The Competition Commission of India (CCI) on Wednesday imposed a fine of Rs87 crore ($13.6 million) on South Korean automaker Hyundai Motor Co's local unit, accusing it of unfair business practices with respect to providing discounts for cars. The company has been directed to cease and desist from such practices.

In a 44-page order, the anti-trust regulator alleged that Hyundai Motor India Limited (HMIL) contravened competitive practices by imposing certain arrangements upon its dealers including monitoring the maximum permissible discount level and mandating the use of certain lubricants and oils.

It was alleged that the company has a discount-control mechanism whereby dealers are permitted only to provide a maximum permissible discount and not beyond the recommended range.

The penalty has been levied at 0.3 per cent of Hyundai Motor India's average relevant turnover of the previous three years, CCI said. ''For the purposes of determining the relevant turnover for the impugned infringement, revenue from sale of motor vehicles alone have been taken into account,'' the watchdog said, adding the final order was passed on the basis of information provided by the dealers.

Hyundai, in a late night statement, said they were surprised by the order and were looking into the matter. ''We are studying the order in detail and will take necessary course of action to challenge the order at appropriate level to protect the interest of our customers and channel partners by abiding (by) all the laws of land,'' Hyundai said.