Last week, the CCI issued an order directing the Director General of the CCI to launch an investigation into the company for alleged misuse of dominant role in its commercial vehicle market in India. Tata Motors, India’s largest automaker, said on Tuesday that it is reviewing the Competition Commission of India’s (CCI) decision to launch an investigation into its commercial vehicles market in India, for alleged misuse of its dominant position.
The CCI expressly stated in its prima facie order that nothing stated in the order shall be construed as a final expression of opinion on the merits of the Case. It is reiterated that the organisation is evaluating the CCI’s order and working with its lawyers to determine the appropriate next steps.
The order was issued in response to two complaints filed against Tata Motors, Tata Capital Financial Services Ltd, and Tata Motors Finance Ltd. The competition watchdog found that the complainants were largely upset because Tata Motors placed unreasonable terms and conditions in the commercial vehicle dealership agreement. It has been claimed that the company abused its dominant position in violation of Section 4 of the Competition Act, which deals with abuse of dominant position.
The CCI had noted that the allegation that the dealership agreement specifies that the dealer shall not launch, purchase, or engage in any new business (of goods or services) even though it is not relevant to the automotive industry seemed to be unduly restrictive and broad in its coverage and interferes with free trade.
However, CCI stated unequivocally that it was not investigating the conduct of Tata Capital and Tata Motors Finance, or the agreements they entered into with dealers for channel financing, as they do not appear to have considerable market influence in the verticals, in which they operate.
Due to the ongoing curbs across the country caused by the second wave of the coronavirus (COVID-19) pandemic, Tata Motors extended the warranty and provided free service to its passenger vehicle owners. Customers whose warranty and free service period are set to expire between April 1 and May 31, will be given an extension until June 30. According to the company, some customers are unable to service vehicles that are scheduled for maintenance.
Due to the Covid 19 surge, customers around the country are unable to carry or send their vehicles to our designated service centres for scheduled maintenance or repairs. As a result, there is a problem when warranty and free service periods as defined by policy expire during the ongoing lockdown.
Tata Motors stated that it has extended its service network to over 400 locations, with 608 service centres located throughout the country. In addition, on May 8, the company reported a price increase across its passenger vehicle range of 1.8% on average, depending on the model and version. The company had recently announced that it has set in motion a comprehensive ‘Business Agility Plan’ to protect and serve the interests of its customers, dealers and suppliers.
