Subsequent Price Reduction For 'Maruthi Jimmy', CCI Dismisses Compliant Against Maruti Suzuki
The Competition Commission of India (CCI) bench of Ms Ravneet Kaur (Chairperson), Mr Anil Agrawal (Member), Ms Sweta Kakkad (Member) and Mr Deepak Anurag (Member) held that discounts offered by Maruti Suzuki over subsequent car models could not be termed anti-competitive because it devalued the earlier purchases of customers. Further, the information filed by a buyer was held to be...
The Competition Commission of India (CCI) bench of Ms Ravneet Kaur (Chairperson), Mr Anil Agrawal (Member), Ms Sweta Kakkad (Member) and Mr Deepak Anurag (Member) held that discounts offered by Maruti Suzuki over subsequent car models could not be termed anti-competitive because it devalued the earlier purchases of customers. Further, the information filed by a buyer was held to be a personal pricing dispute, which could not be covered under Section 4 of the Competition Act, 2002.
Brief Facts:
In January 2023, Maruti Suzuki India Limited launched its new Sports Utility Vehicle (SUV) 'Jimny' in the Indian market. Harmit Ahuja (“Informant”) booked two Alpha models (MT and AT) by paying ₹ 25,000/- each as a booking amount, which was raised from ₹11,000/-. The Informant claimed that this booking amount was paid without knowledge of the car's price and delivery timeline. It was alleged that despite not disclosing these critical details, Maruti Suzuki managed to secure over 30,000 bookings for 'Jimny' within the first 5 months of its launch.
The Informant contended that 'Jimny' was eventually launched in June 2023 with prices significantly higher than expected by the market. The base model, Zeta MT, was priced at ₹ 12.74 Lakh (ex-showroom), which was unrealistically high compared to anticipated market expectations of around ₹ 10.00 Lakh. Additionally, it was claimed that Maruti Suzuki and its dealers pressured customers into purchasing accessories and extended warranties before confirming delivery dates for 'Jimny'.
The Informant further alleged that Maruti Suzuki artificially created hype around 'Jimny', leading customers to believe there would be an 8 to 10-month waiting period. This perceived scarcity allegedly influenced many customers to purchase the vehicle hastily. However, sales data provided by the Informant showed that after the price announcement, sales figures declined over subsequent months.
In November 2023, Maruti Suzuki responded to sluggish sales by discounting the base model 'Jimny' to ₹ 10.74 Lakh and introducing a new variant named 'Thunder' with free accessories, which were previously sold separately. This sudden price drop and bundling of accessories allegedly devalued the Informant's earlier purchases significantly.
The Informant claimed that he communicated his dissatisfaction to Maruti Suzuki via emails in December 2023 and highlighted the disparity in treatment of early customers. Maruti Suzuki initially denied any price reduction but later acknowledged the discount on the 'Thunder' edition.
Consequently, aggrieved by Maruti Suzuki's refusal to refund the excess amount and alleging unfair pricing and abuse of dominant market position, the Informant filed information in the Competition Commission of India (“CCI”).
Observations by the CCI:
In examining the allegations of abuse of dominant position by Maruti Suzuki, the CCI first considered the definition of a 'relevant market'. While the Informant did not specify a relevant market, public information indicated that Maruti Suzuki held a substantial market share in the passenger vehicle segment in India. The CCI noted that Maruti Suzuki's market share in the SUV category, to which Jimny belongs, was approximately 22% in 2022 and 21.5% in 2023. Despite these figures, the CCI noted that Maruti Suzuki's market share did not demonstrate dominance capable of independently influencing market dynamics or consumer choices in its favour.
The CCI referred to its previous findings in Suo Motu Case No. 01 of 2019 regarding Maruti Suzuki's market conduct, where despite its significant market share, no findings under Section 4 of the Competition Act were established. Furthermore, the CCI held that the SUV segment itself is diverse and has various manufacturers and models.
Addressing the specific grievance of price disparity and the refusal of a refund by Maruti Suzuki, the CCI held that the matter primarily constituted an inter-se (between themselves) dispute over pricing between the Informant and Maruti Suzuki. According to the CCI, the sale of a product at a particular price does not entitle the buyer to retrospectively claim benefits from subsequent discounts offered by the seller. Moreover, the price reduction for the 'Thunder' variant was not found to be predatory or anti-competitive in nature.
Therefore, the CCI held that there was no prima facie case of contravention of Section 4 of the Competition Act. Therefore, pursuant to Section 26(2) of the Competition Act, the CCI dismissed the information.
Case Title: Harmit Ahuja vs Maruti Suzuki India Limited
Case Number: Case No. 43 of 2023
Date of Pronouncement: June 6th, 2024