Carmakers may be forced to sell spares in open market

Most carmakers sell spares only at their authorized service centers and even then spares are not available over the counter. Only if you get the car repaired at the center will you be given spares. But that’s set to change.

The Competitive Commission of India (CCI) may issue an order which will force car makers to sell spare parts in the open market. CCI, in a one year probe has found that some car manufacturers are withholding sales of spare parts in the free market.

The findings were based on facts gathered from the after-market supply chain by interacting with car companies, open market retailers and component makers.

The CCI probe started in March 2011 when a car buyer accused car companies of abusing their market dominance by making spare parts available only via their authorized dealers. These authorized dealers, in turn sold the spare parts allegedly at high rates.

Car makers such as Volkswagen, Honda, GM and Ford have reported to have said that they would comment only after studying the CCI report. But Toyota (TKM) deputy MD has stated to the Times of India that restriction of spare parts was not anti-competitive and that only accredited people (authorized dealers’ service centre) should fix the parts in the interest of quality and safety for customers.

Enforcing a rule to allow spare parts in the open market will be a boon for car owners as it will address two hurdles that car owners face: high auto spare parts costs at OEM’s authorized dealerships and auto spare parts shortage especially in semi-urban and rural areas.