China’s antitrust regulator fines Ford’s Changan venture US$23.6 million for price violations amid worsening trade tensions with US
- Changan Ford’s penalty is the second since General Motors Corp was penalised 201 million yuan in 2016 for antitrust violations, seen as a warning shot to then President-elect Donald Trump
- China’s commerce ministry said last Friday that it was compiling a list of “unreliable” foreign businesses and individuals deemed to be hurting Chinese interests
China’s antitrust regulator slapped a US$23.6 million fine on Ford Motor Company’s Chinese venture for restricting sales prices in its hometown, taking the second such action against US carmakers in three years as trade tensions deteriorated between the world’s two largest economies.
Changan Ford Automobile, the 50:50 venture between Michigan-based Ford and Chongqing Changan Automobile, must pay a penalty of 162.8 million yuan (US$23.6 million) – equivalent to 4 per cent of the venture’s annual sales in Chongqing – for a business practice that restricted retail prices since 2013, according to a statement by the State Administration for Market Regulation.
The antitrust fine on Changan Ford is the latest salvo by China after the commerce ministry’s Friday announcement that it was compiling a list of “unreliable” foreign companies and individuals deemed to be hurting Chinese interests. While the ministry did not specify the consequences or provide additional details, the parameters were for entities that blocked or cut back supplies to Chinese companies for non-commercial purposes.
“It is not unusual that authorities uncovered wrongdoings by car companies to intervene into dealers’ selling prices,” said Tian Maowei, a sales manager at Yiyou Auto Service. “But the timing of fining a US carmaker now seems to have a connection with the trade tensions between the two countries.”
