China to act against Audi, Chrysler

China said it would punish Audi and Chrysler and around 10 Japanese spare parts makers for violating the country's anti-monopoly law, Reuters reported.

According to the National Development and Reform Commission (NDRC), the body tasked with anti-competitive pricing rules enforcement, it had found Chrysler and Audi were engaging in monopolistic behaviour.

The government had also completed investigations into 12 Japanese car parts makers and would punish those involved in breaking the anti-monopoly law, Li Pumin, spokesman of the NDRC, said at a press conference in Beijing.

The NDRC did not name the spare-part makers and also did not say how many of them would be punished.

China is stepping up efforts to bring about compliance with an anti-monopoly law enacted in 2008, having in recent years, targeted industries as varied as milk powder and jewellery.

According to the NDRC it was also conducting an investigation into Mercedes-Benz. The Jiangsu division of the NDRC last week conducted investigations into Mercedes-Benz dealers in five cities.

According to a spokesman from the regulatory body, it had been found that Audi and Chrysler did have ''monopoly behaviour'' and they would be punished accordingly in the near future, BBC reported.

The regulator did not clarify what it meant by "monopoly behaviour".

While Audi is a unit of German carmaker Volkswagen, Chrysler of the US had recently merged with Fiat of Italy.

Meanwhile, foreign companies are increasingly feeling vulnerable.

According to some observers multinational corporations made convenient political scapegoats for a government keen to show it was fighting for the consumer and tackling abuses of corporate power.

They add China could claim, to some extent at least, that it was tackling a genuine problem - the perceived pricing gap between goods sold in China and foreign markets, a gap which was obvious to the increasing numbers of affluent Chinese travellers on foreign visits.

According to some sectors, particularly luxury car makers, China's own heavy import duties accounted for much of the increase in their prices, though Chinese media accuses manufacturers of using their monopoly power to their own advantage.

Meanwhile, BBC quoted a emailed statement from Audi's office in China: "We can confirm that the Hubei Price Bureau is investigating the dealership network of the FAW-Volkswagen Audi Sales Division Audi in Hubei province.

"Audi and its Joint-Venture FAW-Volkswagen support the government investigation and co-operate with the NDRC."