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Journalism of Courage
NEW DELHI, FEBRUARY 6: The Monopolies and Restrictive Trade Practices Commission MRTPC has ordered an enquiry against auto major Maruti Udyog Ltd MUL and its 110 authorised dealers across the country for allegedly indulging in restrictive trade practices.
Issuing a notice of enquiry, MRTPC directed MUL and its dealers to file their reply ten days before the next date of hearing on February 21.
The authorised dealers were being prevented from taking up any business other than that of MUL or its licensor Suzuki Motor Corporation of Japan even when the agreement between MUL and the dealers was on principle to principle basis and the latter had invested large funds as capital, DGIR alleged in its complaint.
quot;The saidpractice also obstructs the flow of capital into the stream of production and it is a restrictive trade practice which has an inevitable effect of distorting competition in passenger cars market, imposing unjustified costs on the authorised dealers as well as on ultimate consumers,quot; it alleged.
Asking MRTPC to direct MUL and its dealers to amend the impugned clauses of the dealership agreement, DGIR pointed out that the 110 dealers were allegedly not allowed to advertise or promote sales without the written approval of MUL.
The agreement allegedly barred MUL dealers from appointing their agents for collection of deposits from customers, delivery of vehicles or their servicing, it added.
quot;Such a trade practice is a manipulation of conditions of delivery which also imposes unjustified costs and restrictions on the consumers,quot; DGIR alleged.
It also restricted the authorised dealers from opening new outlets and investing any capital in them, DGIR said in its application to the commission.
EEBadds: The recent sales figures reported by various car manufacturers in suggest a declining trend in Maruti8217;s fortunes. Even after an impressive growth of over 25 per cent in the current fiscal, Maruti has not been able to maintain its top position in mid-size Zen segment or the premium segment Esteem during the month of Jan 2000.
In fact, Korean chaebol Hyundai sold 1,243 units of Accent as compared to 1,144 units of Esteem sold by MUL due to quot;novelty factorquot;. But Santro has displaced Zen from the top slot in January is beating Maruti in two segments too much of a coincidence?
