China Blasts Foreign Carmakers

China Blasts Foreign Carmakers

China’s government-controlled television broadcaster took aim at foreign carmakers and dealers on Sunday on a day dedicated to consumer rights‚ alleging problems from pricing to quality in the car industry market.

China Central Television in a national news broadcast alleged that Tata Motors’ Jaguar Land Rover is selling some models with faulty gearboxes in China. On its website‚ it accused Volkswagen of refusing to recognise quality defects‚ saying that many owners of the Sagitar sedan complained about problems with the model’s rear axle.

It also took aim at dealers. It said dealerships for Daimler’s Mercedes-Benz‚ VW and Nissan are overcharging consumers at some of their service centres in China. CCTV said that in some cases the foreign car makers were charging more than double for car repair and billing customers for unnecessary services. Nissan said that it prioritises its relationship with customers in China and is launching an investigation into CCTV’s allegations. A spokeswoman for VW said the company is monitoring its dealers and making efforts to improve customers’ experiences.

“We have paid close attention to CCTV’s reporting‚” she said‚ adding‚ “we sincerely apologise for any inconvenience caused to our customers.” Land Rover apologised in a statement and said that in January it began offering gearbox software updates‚ which are ongoing. “We offer our sincere apologies for any inconvenience and concern this may have caused our customers‚” the statement said. A spokesman for Daimler in China said on Monday the company was investigating the matter and that such practices infringed consumer rights and displayed “irresponsible behaviour” toward the Mercedes-Benz brand.

The state broadcaster’s allegations come on World Consumer Rights Day‚ a little-known commemoration day in the West. But in China‚ the day has become an annual tradition meant to champion stronger consumer power in a market where consumers frequently must deal with fake or faulty products and where retailers and product makers typically call all the shots‚ making returns or exchanges difficult.

CCTV’s 315 broadcast‚ as it is known in China for the date of Consumer Rights Day‚ represents the rising power of consumers in an increasingly affluent country. In the past it has taken on companies such as Volkswagen‚ Apple‚ McDonald’s and retailer Carrefour. Some local and multinational companies have been bracing for the broadcast by offering discounts on their websites and posting messages regarding consumer issues on their social-media feeds. Other industries highlighted by the CCTV broadcast included petrol and e-commerce‚ though it didn’t name specific foreign companies.

CCTV has previously highlighted Volkswagen in its annual consumer-rights programming. In 2013‚ the broadcaster accused VW of selling cars in China with substandard direct-shift gearbox systems‚ causing acceleration problems and car accidents for an unspecified number of consumers. Volkswagen said then it planned to fix gears with problems for customers in China.

China has propelled growth for car makers in recent years‚ though sales growth is slowing now. In the first two months of this year‚ a total of 3.43-million passenger vehicles including sedans‚ sport-utility vehicles and minivans were sold in China‚ up 8.7% from the same period in 2014‚ the government-backed industry group China Association of Automobile Manufacturers said on Tuesday. The growth compared with an 11% year-over-year rise in January-February 2014.

Wall Street Journal