China's Ministry of Commerce(MOFCOM) has launched an anti-trust probe in the auto sector, the Beijing-based Legal Mirror reported on Thursday.

The MOFCOM had issued a questionnaire to the China Automobile Dealers Association to solicit opinions on regional unfair competition practices and industry monopolies. This is a second probe after the auto association submitted the requested information to the anti-trust arm of the National Development and Reform Commission last year.

Mercedes-Benz to cut prices of auto spare parts in nation

Beijing Mercedes-Benz Sales Service Co, the German premium carmaker's sales, marketing and after-sales unit in China, announced on August 3 that it would lower the prices of some of its spare parts in the country in response to Chinese authorities' ongoing antitrust investigation of the auto sector.

The price cut, which will take effect on September 1, covers over 10,000 spare parts of all Mercedes-Benz models, and will be as much as 15 percent for some parts after the adjustment, the company said in a statement e-mailed to the Global Times.

"The adjustment¡­would lower costs for users and further enhance Mercedes-Benz's competitiveness in the after-sales market," the statement said.

In July, the company already lowered its maintenance prices by around 20 percent.

The price adjustment comes at a time when the auto sector is undergoing an antitrust investigation launched by China's top economic planner, theNational Development and Reform Commission(NDRC), and theMinistry of Commerce.

Several premium auto brands have decided to lower their prices recently.

The China unit of UK high-end auto brand Jaguar Land Rover, for example, said on July 25 that it would cut the prices of three models in China by some 200,000 yuan ($32,366.13) each on average.

FAW-Volkswagen Automotive Co, which produces Mercedes-Benz' rival brand Audi in China, announced on July 26 that it would lower the prices for spare parts.

In a statement e-mailed to the Global Times in late July, the company said that its Audi unit has been "actively" cooperating with the investigation launched by the Chinese authorities.

As Mercedes-Benz follows suit, BMW, another premium auto brand in the Chinese market, is also very likely to make similar decisions, Wu Shuocheng, editor-in-chief at industry portal auto.gasgoo.com, told the Global Times on Sunday.

Wu noted that the price cut could bring benefits to both consumers and the overall after-sales market.

It is a foreseeable trend for high-end carmakers to lower their prices in China because of increasing competition, said independent analyst Zhang Zhiyong.

"But the authorities' antitrust investigation will increase their price cuts," Zhang said.

"As a result, the price difference between premium cars sold in China and abroad will be narrowed," he added.

Chinese authorities have stepped up efforts to fight monopolistic behavior. In the latest case, the State Administration for Industry and Commerce confirmed last week that it had launched an antitrust investigation into Microsoft Corp.

British luxury carmaker Jaguar Land Rover, owned by India's Tata Motors Ltd , said it planned to cut prices on three models in China due to the government's anti-monopoly probe.

Jaguar Land Rover will cut prices on the cars by an average of 200,000 yuan ($32,300) starting Aug 1, after the National Development and Reform Commission (NDRC) launched an investigation into the auto industry, the company said in a statement last Friday.

"Due to the importance of the Chinese market, Jaguar Land Rover China immediately set up a process to review our pricing and decided to voluntarily reduce the price of three models," the carmaker said.

The price adjustment will also strengthen competitiveness and increase market share in China, Jaguar said.

China's auto sector, dominated by foreign players such as Volkswagen AG and Toyota Motor Corp, has become the latest industry to be targeted by antitrust regulators, who have already punished companies in sectors ranging from milk powder to eye glasses over pricing.

Jaguar Land Rover will cut its suggested retail price of three models including the Ranger Rover 5.0 V8, Ranger Rover Sports 5.0 V8 and Jaguar F-Type Cabriolet.

Local and foreign media previously reported that foreign car makers including Mercedes-Benz were being probed by NDRC for possibly over-charging customers in China.

Earlier last week, Nicholas Speeks, head of China sales at Daimler AG's Mercedes-Benz, said he was unaware of any NDRC investigations but added that the price regulator had expressed some concerns to the German luxury carmaker. It did not elaborate.

Jaguar said its price cut was in response to the industry investigation by the NDRC's Bureau of Price Supervision and Anti-Monopoly.

NDRC said in the past that it was collecting evidence of possible anti-competitive behaviour in China's vehicle and autoparts market.

FAW-Volkswagen cuts parts prices

FAW-Volkswagen Automotive Co said on Sunday that it plans to lower the prices of self-produced Audi models' spare parts, which analysts said is partly due to the Chinese government's anti-monopoly probe.

In order to improve customer satisfaction, FAW-VW will roll out big price cuts on spare parts starting Friday, according to a statement that FAW-VW's Audi section e-mailed to the Global Times.

The ratio of the total market price of all of the Audi A6L's components to the entire vehicle's price will be set at 291 percent, down from 411 percent, the statement said. The change will result in lower maintenance costs for customers, it added.

Analysts attributed the price cut to the pressure from China's antitrust regulator.

"The National Development and Reform Commission(NDRC) launched an investigation into the local auto market recently, which triggered the price adjustment among foreign automakers," Su Hui, deputy director of the auto market division at the China Automobile Dealers Association (CADA), told the Global Times Sunday.

FAW-VW's statement did not say that the price adjustment is a direct consequence of the probe, but revealed that its Audi section has "actively" cooperated with the "relevant investigation" launched by the NDRC, China's top economic planner.

Ge Shuwen, executive vice general manager with FAW-VW's Audi business unit, disclosed in the statement that the NDRC's Bureau of Price Supervision and Anti-Monopoly paid "utmost attention" to the country's auto parts industry at the beginning of the year.

CADA has been helping the Ministry of Commercew ith the collection of evidence relating to possible anti-competitive behavior since early June, according to information published on the association's website on June 6.

Su said that while he believed the anti-monopoly investigation is good news for China's auto market where anti-competitive practices exist, he thought healthy development in the auto industry depends on what kind of measures the government will issue based on the final probe result.

According to Su, all car brands have to designate their own exclusive agency to operate in China. Such agencies have the power to control the pricing of all links in the process of selling a car, such as the vehicle's price and the fees of after-sales services, Su said, adding that this may create a monopoly in the market.

The regulator found that some automakers exploited their monopoly position and is likely to impose punishments soon, Shanghai-based Oriental Morning Post reported Friday. Officials from NDRC could not be reached by press time.

FAW-VW is not the only automaker to have decided to adjust their prices in China in recent days. UK premium automaker Jaguar Land Rover, a subsidiary of India's Tata Motors, was quoted by Reuters on Friday as saying that it would cut the prices of three models in China, averaging 200,000 yuan ($32,300), citing the antitrust probe.

Calls to Jaguar's Beijing branch remained unanswered by press time.

Because of the probe, China will see more automakers follow the actions of Audi and Jaguar, Su remarked.

In addition, analysts believed that neck-and-neck rivalry and weak demand in the luxury auto market were also other factors for the price cut.

Although Audi has performed fairly well in the Chinese market, it is confronted with fierce competition from foreign counterparts such as BMW and Mercedes-Benz, said Zhang Zhiyong, a Beijing-based independent industry watcher.

Mercedes-Benz is cutting the prices of its spare parts and service charges by 20 percent in China to further satisfy customers, Nicholas Speeks, head of the German luxury automaker's China unit, was quoted by media reports on Tuesday as saying.

"In order to maintain its current position, Audi needs to turn to price cuts to win price-sensitive customers in China as well," Zhang told the Global Times Sunday.

While the number of units that Audi sold in China surged by 18 percent in the first six months of this year, sales of BMW jumped by almost a quarter in the same period, Reuters reported earlier this month.

But Audi still led China's luxury auto market in the first half of 2014, selling 268,666 vehicles, exceeding the sales of BMW by 43,666 cars over the same period, Reuters said.