South African companies of five international auto makers have been fined a total of 31.65 million rand (5 million US dollars) by the country's competition watchdog for price fixing, collusion and onerous franchise agreements, it was reported on Wednesday.

Those involved in "administrative penalties" by the Competition Commission were General Motors, Nissan, Volkswagen and its dealers in Gauteng province, Citroen, DaimlerChrysler, and the Subaru dealer body, said an I-Net Bridge report.

The commission is still in negotiations with BMW dealers and intends prosecuting this case should an agreement not be reached by the end of January 2006, it said.

The manufacturers and dealers have also agreed to implement programs to ensure that their businesses comply with the Competition Act, in particular to eradicate the practice of minimum resale price maintenance and collusion among dealers.

The watchdog launched an industry-wide investigation into the prices of new motor vehicles in April 2004, finding evidence of some manufacturers imposing minimum resale prices on dealers, dealer collusion and anti-competitive franchise agreements.

The commission's investigation on excessive pricing revealed that prices of models sampled were on average 14 percent higher in South Africa when compared to similar models in European Union (EU) countries and Britain.

As a result of the commission's intervention, auto dealers in South Africa would no longer have the excuse that they were bound to a maximum discount, said acting commissioner Shan Ramburuth.

"This will give consumers greater power to negotiate better discounts with dealers and should lead to increased competition and lower prices," Ramburuth said.

Source: Xinhua