Tue, Mar 17, 2015 - Page 15 News List

China probes carmakers after show

IN THE HOT SEAT:Foreign makers such as Volkswagen and Mercedes apologized and vowed action after a Chinese consumer show criticized their after-sales services

Reuters, SHANGHAI

Mercedes-Benz cars are displayed in a dealership of German car manufacturer Daimler in Munich, Germany, on May 17, 2013.

Photo: Reuters

Carmakers, including Volkswagen AG, Nissan Motor Co and Daimler AG’s Mercedes-Benz, said they are probing allegations aired late on Sunday by Chinese state TV that the firms oversold repairs and spare parts to drivers.

The annual 3.15 consumer rights day investigative special, similar to CBS network’s 60 Minutes in the US, also criticized Jaguar Land Rover for gearbox problems in some cars.

China is the world’s top auto market, and media criticism can dent reputations and drag on sales. Apple Inc made a rare apology in 2013 after criticism on the show of its after-sales service.

Mercedes and Jaguar Land Rover are already being probed by China for possible anti-competitive behavior. The Chinese venture of German car maker Volkswagen was fined last year for price-fixing.

Volkswagen, a target two years ago of the China Central Television (CCTV) show, was also criticized in an article ahead of the program for its handling of a recall of its Sagitar model car.

“We have paid close attention to CCTV reporting... and we sincerely apologize for any inconvenience caused to our customers,” Volkswagen China spokeswoman Larissa Braun said.

Nissan’s China joint venture said it would set up a team to investigate the allegations and strengthen regulation of its service teams, a statement on its official microblog said.

Mercedes-Benz said it would launch a probe and urged dealers to reform their behavior. Land Rover apologized to its customers on its official microblog and said it was working to resolve the issue.

The popular show, which singled out camera maker Nikon Corp last year, also said that fast-food chain Xiabuxiabu had used pig’s blood as a cheaper substitute for duck’s blood — a popular hotpot delicacy.

The company said in a statement that it would investigate the allegations and suspend sales of duck blood products.

Fast-food outlet McDonald’s Corp, supermarket chain Carrefour SA and home products firm Procter & Gamble Co have also previously come under the show’s spotlight.

Some firms have pushed out cut-price deals to consumers in the run-up the event to win over consumers in case they are targeted on the show.

CCTV itself has come under fire in China over the last couple of years, with some consumers rushing to defend its targets or simply changing channels.

However, marketing experts said that without damage control the impact of such shows in China could damage companies severely.

“The 3.15 show still packs a punch to the firms targeted, and a poor or flippant response from a targeted company can evoke consumer outrage,” said James Feldkamp, chief executive officer of consumer watchdog MingJian.

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