The Competition Commission of India (CCI) has allowed OEM until 10th July, 2013, to comply with prevailing laws of selling spare parts in the auto aftermarket. There is an ongoing standoff between auto makers and their supply chain, as OEMs holds exclusive rights over selling of spare parts to third parties. And dealers and components suppliers require prior approval from OEMs.
Dealer arrangements of OEMs also restrict sales of spare parts over the counter to independent repairers, whose service charges are lower by 30-35 percent. The CCI investigation started on the complaint of an auto customer. The Competition Commission of India investigated 17 Original Equipment Manufacturers contracts with their dealers and component suppliers. The Commission’s verdict may not change service and repairs labour costs but spare parts will definitely come at cheaper prices, as dealers will be allowed to sale spare parts directly. Hence, repair and service charges may become more affordable at authorised dealerships. The verdict of the CCI may also tackle flow of sub-standard auto spare parts in the aftermarket.