China: GM said to be under antitrust investigation

GM’s Chinese joint venture with SAIC is being investigated by the Chinese government for possible antitrust violations, Bloomberg said Wednesday, citing people familiar with the matter. The probe is reportedly being conducted by China’s powerful National Development and Reform Commission. Some dealerships in the SAIC-GM network have been investigated over retail pricing practices, sources told Bloomberg.

This would not be the first time that GM’s China arm has appeared in the NDRC’s cross hairs. In 2014, GM China had to answer to government regulators investigating retail pricing for cars and especially for parts. Original parts can be an extremely lucrative business for automakers, more so when they can dictate to their dealers where to buy them. Back then, GM was not alone on the Chinese government’s radar. Audi agreed to pay $40 million for alleged violations. Volkswagen and Chrysler were fined a combined $46 million. Daimler‘s Mercedes-Benz had its offices raided; Toyota and other Japanese companies faced investigations. In the wake of these investigations, foreign automakers relaxed their grip on parts pricing in China.

The surprising report of an investigation of GM comes suspiciously close to President-elect Trump’s incendiary recent comments on Taiwan. Trump said that the US could change its long-standing position that Taiwan is part of “one China,” which shocked the Chinese political scene. Along with Tibet and Tiananmen, Taiwan is one of the most sensitive issues in China, commonly referred to as the “three Ts.”

Full Content: Forbes

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