Indonesia Exonerates Astra Honda

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Indonesia’s competition regulator ruled last month that motorcycle dealer Astra Honda Motor did not violate regulations by requiring owners of its authorized workshops to use its own brand of lubricants.

Staff prosecutors with the Business Competition Supervisory Commission (KPPU) had previously advised that the company’s practices were a violation of rules meant to foster competition among suppliers and to allow choice for consumers.

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But the commission exonerated Astra Honda in a ruling announced Feb. 25. Commissioners ruled that the company’s policies with owners of Astra Honda Authorized Service Shops did not result in a bundling of service and spare parts, including lubricants.

The panel found the practices did cause a tying of services and its own brand of parts, which is also prohibited by Indonesian law, but it concluded that consumers are not harmed by the practice, since discounts are also offered to AHASS owners to incentivize their use of AHM-branded lubes.

Since the regulation is designed to protect consumers, the commission reasoned that Astra Honda did not violate it.

PT Astra Honda Motor, is a joint venture between Japanese automaker Honda Motor and PT Astra International, an Indonesian conglomerate and the largest auto group in Southeast Asia. Astra Honda Motor assembles and distributes Honda scooters, and it also franchises a chain of Astra Honda authorized service stations that offer service and maintenance on the scooters. Two-wheelers are the dominant mode of transportation in Indonesia and much of Southeast Asia, and Honda is a leading brand.

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Finished Lubricants    Indonesia    Market Topics    Region    Southeast Asia