India's Competition Regulator Orders Antitrust Probe Into Tata Motors' Commercial Vehicle Business

The Competition Commission of India (CCI) has ordered an antitrust investigation against the commercial vehicle business of Tata Motors Limited. There are allegations that the country's largest seller of commercial vehicles abused its market position while supplying CVs to some of its dealers. According to the allegations made by former dealer partners of the company, Tata Motors dictated the terms around the quantity and type of vehicles they should stock and also worked in concert with affiliate firms while advancing credit.

Also Read: Tata Motors Updates Its Standard Operating Procedures Amidst COVID-19 Crisis

When reached out to confirm the report, a Tata Motors spokesperson said, "We have learnt that the Competition Commission of India ("CCI") has passed an order directing the Director General, CCI to initiate investigation against Tata Motors Limited's (TML) commercial vehicles business in India. We understand that the CCI has passed a prima facie order and has not made any final or binding observations with regard to the allegations levelled against TML. TML is currently reviewing the copy of the order available in the public domain and will consult its legal counsels to take necessary steps."

Also Read: Coronavirus Pandemic: Tata Running Operations At Pune Plant With Limited Workforce

CCI says Tata Motors appears to have abused its dominant position and the case "requires an in-depth investigation"

Based on the allegations, the Competition Commission of India (CCI) in its order said that Tata Motors appears to have abused its dominant position and the case requires an in-depth investigation. In its order, the competition regulator also mentioned that Tata Motors coercing its dealer partners to order the vehicles according to its whims and fancies is anti-competitive. The order also states that Tata Motors has denied all allegations before CCI. The investigation team needs to submit the final report with 60 days, however, history has shown un that such probes typically last for months.

Currently, Tata Motors holds over 40 per cent market share in the segment, making it the biggest seller of commercial vehicles in India. That company offers a range of trucks and buses in India and mainly competes with the likes of Ashok Leyland and Mahindra and Mahindra.