CCI orders probe against Maruti Suzuki

The Competition Commission of India (CCI) has ordered a detailed probe against carmaker Maruti Suzuki for alleged resale price maintenance arrangement with dealers.

Generally, resale price maintenance refers to an arrangement between a buyer and seller wherein the resale price is stipulated by the seller.

It is alleged that dealers of Maruti Suzuki India Ltd (MSIL) in a particular region are not permitted to give extra discount to their customers and if a dealer is found offering discounts more than the permitted level, a penalty is levied, according to CCI.

The commission, in a 10-page order, said that the present matter arised after an e-mail was sent by a purported dealer anonymously against MSIL, alleging resale price maintenance resorted to by the carmaker in certain areas.

It is also alleged that a similar discount control policy is implemented by MSIL across India - specifically, in the cities where more than five dealers operate in a single city.

MSIL, in its response, had stated that it does not exercise control or supervision over the dealers, except to maintain a balance between satisfaction of consumers and uniformity in schemes.

Besides, there is no clause in dealership agreement which allows it to levy penalty on the dealers for providing discounts higher than those prescribed, the auto giant said.

(with news agency inputs)