CCI rejects abuse of dominant position charges against Nissan

It was alleged that the company had been trying to preserve the dominant power of Dada Motors in Ludhiana market

The Competition Commission 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.

A complaint was filed with the Commission against Nissan Motors India, its service partner, Hover Automative India, as well as Dada Motors, which is the auto firm's authorised dealer for Ludhiana and Jalandhar. The complaint was filed by Tristar Trading, an erstwhile dealer of Nissan Motors in Ludhiana.

It was alleged that Nissan Motors and Hover, in collusion with Dada Motors, had been trying to "preserve, increase and consolidate the dominant power" of Dada Motors in Ludhiana market which had led to distortion of competition in sales and services of Nissan cars.

Further, it was charged that Tristar Trading's dealership agreement was terminated without a reason and that the agreement had certain abusive clauses.

In an order released today, the Competition Commission of India (CCI) said that prima facie there was "no competition concern actionable under...The (Competition) Act".

Citing data available with it, the Commission noted that Nissan Motors was not dominant in India and therefore the "question of abuse of dominance would not arise"

The watchdog also noted that the dealership agreement was terminated as Nissan had received complaints from customers that they had paid advance to Tristar Trading but the money was not remitted to the auto company for delivery of vehicles.

"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," the regulator said.

Tristar Trading was authorised to sell Nissan vehicles, including its products on a non-exclusive basis in Ludhiana.

The complainant submitted with CCI that while they were in the process of getting the showroom constructed, they were barred from selling latest 2010 models of Teana and X-trail cars and were allowed to sell only older models.

However, Nissan had allowed Dada Motors to sell cars in a showroom where the workshop was not complete and had also allowed another dealer in Chandigarh to sell new cars despite it not having proper facilities.

Further, it was alleged that "due to undue pressure" from Nissan Motors, an understanding was reached wherein Tristar Trading would transfer its bookings to Dada Motors and share a commission on 50-50 basis. However, no such commission was allegedly shared between the Tristar Trading and Dada Motors.