Earlier today, as part of the annual World Consumer Rights Day campaign, China’s government-controlled television broadcast took aim at foreign carmakers and dealers. The problems they alleged ranged from pricing to quality in the auto-industry market.
The main targets were Tata Motors Ltd’s Jaguar Land Rover, Voltswagen, as well as the some dealers. The CCTV alleged that Tata Motors Ltd.’s Jaguar Land Rover is selling some models with faulty gearboxes. Then on its website accused Volkswagen AG of refusing to recognize quality defects, quoting many customer complaints about the rear axle in Sagitar sedan models. The CCTV said that “dealerships for Daimler AG’s Mercedes-Benz, Volkswagen and Nissan Motor Co. are overcharging consumers at some of their service centers in China.” And that in fact –
“in some cases the foreign car makers were charging more than double for car repair and billing customers for unnecessary services.”
On the upside, both Nissan and VW have responded to the allegations, reassuring the public that they will begin investigations. Also Land Rover has issued a statement of apology and said that they have been offering gearbox software updates since January.
China is currently a breadbasket for the auto industry with a total of 3.43 million passenger vehicles sold in just the first two months of this year. Although the sales growth is now slowing, this still makes up a large portion of the sales for the companies. Because of this the Chinese have a large pull and can cause changes and improvements to their options.
This reminds me of what we have talked about recently in class, in particular how VW has been holding back its newer models and equipment. I wonder if this calling out of sorts will cause an increase in the quality or speed with which new products come into China from VW or if that will be the talk of a similar publication in the future?