Mercedes-Benz GLA Concept car at the Shanghai Motor Show.

On Thursday a Chinese government regulator has stated that they have fined Mercedes Benz a total of 350 million Yuan (57 million dollars) over price fixing charges after a broad ranging probe of the car industry. This whole incident has caused complaints from foreign automakers who claim that they are being treated unfairly. Their Germany based Daimler AG unit was fined for alleged violations of anti monopoly law of China which sets minimum prices that dealers are supposed to honor when charging for replacement parts and car sales. In many other countries setting a minimum retail price is standard but the Chinese regulators reject this, in their belief this is a form of violation of free market competition.

The targets for the regulators have been technology suppliers, automakers and dairies during a series of investigations which focused on anti monopoly. The investigations were ongoing over the last two years and their goals were to make companies lower their prices. Business groups have stated that the way the investigations are conducted are abrupt and secretive which is alienating foreign companies. The United States Chamber of Commerce has stated last year that Beijing is walking towards violating its commitments as a free trade country. President Xi Jinping’s ruling communist party has made a promise that they will work on making China’s economy even more productive as they plan to open up more towards foreign and private competition. However at the same time China is trying to create national giants in the fields of automakers, the aerospace industry and telecoms. Certain business groups that deal in China said that it is their opinion that these regulators are trying to use the anti monopoly law and similar regulations to put domestic companies in front of foreign competition. This claim has been denied by the regulators and they say the foreign companies are treated equally.

A high ranking government official was quoted by the Xinhua News Agency in September, stating that the prices which Mercedes charged for replacement parts were so high that if someone bought all of the parts individually, and try to put together a C class Mercedes it would cost him the total of 12 vehicles. Because of these investigations Audi and Mercedes cut their prices of windshields by 38 percent last year. Fiat Chrysler Automobiles unit also cut costs on imported Dodge, Chrysler and Jeep vehicles.