General Motors’ Chinese joint venture with SAIC, Shanghai GM, says it was contacted by China’s antitrust regulator in regard to the government organization’s investigation into the auto industry, Automotive News reports. China’s anti-monopoly organization has ramped up its enforcement of antitrust rules in recent months, the focus of the probes being whether or not automakers have forced their dealers to set high, standardized prices for replacement parts and put price premiums in place on cars.
Shanghai GM said it has “actively responded” to requests from the National Development and Reform Commission’s price supervision and anti-monopoly bureau since 2012. The automaker also said it has assisted and been cooperative with its investigation into the auto industry.
GM said today the cost of replacing the all parts in the average Cadillac was 330 percent more than the entire model was new, The New York Times reports. For Buicks, the cost was 284 percent and for Chevrolets it was 265 percent. The cost of replacement parts in the United States has been the subject of debate in the past, with some arguing automakers make it too hard for parts to be acquired and that the parts are too expensive.
A similar problem in regards to auto parts is happening in China. The government has started to urge automakers to lower the prices of replacement parts in the country in order to protect consumers.
In China, the cars themselves can also carry a hefty premium compared to other markets. The country imposes a number of heavy taxes on cars, consisting of a value-added tax of 17 percent, an import tax of 25 percent and a consumption tax based on engine displacement. However even before taxes cars are usually more expensive in China. Analysts say this is due to the incredible spike in sales China has seen since 2000, which has led to a shortage in some models, driving prices up.
Audi, BMW, Mercedes-Benz, Jaguar Land Rover, Chrysler Group, Toyota and Honda recently announced price cuts on models as a result of a government investigation. Some foreign automakers have argued the investigations are discriminatory against foreign automakers, with the probes rarely targeting domestic Chinese companies. China’s anti-trust arm denies this notion.