CCI rejects case against Nissan Motors India and its distributors

Complaint of Ludhiana-based Tristar Trading Private Limited does not raise any competition concern, says CCI

The Competition Commission of India (CCI) has rejected allegations that auto-maker Nissan Motors India abused its dominant market position with respect to sales and services of its cars in Ludhiana, Punjab. The order was in a petition filed by Ludhiana-based Tristar Trading Private Limited and its directors against Nissan Motors India Pvt Ltd, Hover Automotive India Pvt Ltd, and Dada Motors Pvt Ltd.

According to the complaint of Tristar Trading, the company has entered into a dealership agreement on June 2010, and while it was in the process of constructing the showroom, it was barred from selling latest models of 2010, and was asked to sell the older models, while another dealer was allowed to sell new cars.

Tristar Trading was also asked to transfer their bookings to Dada Motors and get billed from there and later the dealership agreement with Tristar Trading was terminatied in November 2010. The company alleged that Nissan Motors and Hover Automotive by abusing their dominant position indulged in malpractice resulting in denial of market access for the Informants by favouring Dada Motors.

However, the CCI observed that as per data from the industry association, it is evident that a number of other automobile manufacturers have established their presence in India and that marketshare of Nissan Motors is very negligible in the passenger care segment in India. As a result, in dealership network Nissan will not have much spread than that of Maruti, Hyundai, Tata etc.

"Therefore, it cannot be said in the market of providing dealership, OP1 (Nissan Motors) was dominant. Since OP cannot be said to be a dominant player in the relevant market, the question of abuse of dominance would not arise," said the CCI Corum.

It further added that the dealership agreement was terminated as there were complaints from the customers that they had paid advance to Tristar Trading, however, the money was not remitted to Nissan for delivery of vehicles as per their agreement.

"The issue between the car manufacturer and its erstwhile dealer arising out of termination of the dealer agreement appears to be a commercial and contractual dispute and does not raise any competition concern," added the coram comprising of CCI Chairperson Ashok Chawla, Members, Geeta Gouri, Anurag Goel, ML Tayal, Retired Justice S N Dhingra and S L Bunker.

The CCI added that the commission is of the prima facie opinion that there arise no competition concern actionable under Section 4 of the Act and the case deserves to be closed.