Volkswagen's deep-rooted arrogance in China

Volkswagen Group China faces nationwide protests after owners of the New Sagitar expressed dissatisfaction over its handling of a recall to fix a potential defect in the suspension system. After extensive complaints about a broken axle from owners of the New Sagitar made by FAW-Volkswagen, the German carmaker was forced to announce on October 17 to recall 563,605 New Sagitars and 17,485 Beetles. But Chinese consumers were furious to learn that VGC’s solution to the recall is only putting up a metal plate on the rear torsion crank axle of the problematic vehicle. At a press conference on October 24, VGC said that this “will stabilize the vehicles and send warning noises” in case of a failing axle. VGC’s executive vice president Soh Weimin said that “the axle is safe and installing the metal plate is like ‘providing a double assurance.’” Angry car owners protested at Volkswagen dealerships in major cities in China displaying banners condemning Volkswagen for being “irresponsible” and putting customer’s life at risk. A message circulating on the QQ social media urged New Sagitar owners to stage another round of protests in 100 cities on November 9. New Sagitar owners demand that Volkswagen replace the problematic rear suspension or take back the vehicles for a refund. Some analysts believe that VGC’s solution for the recall lacks sincerity and respect for consumers because the cost for replacing the rear suspension of the problematic cars would amount to only half of the German carmaker’s annual advertising budget. A group of New Sagitar owners have reportedly enlisted the Beijing Jingshi Law Firm to represent them in a possible law suit. Of the more than 100 clients, 53 said the rear suspension of their New Sagitar has various problems which make it unsafe to drive. Similar to the case of VGC’s DSG crisis earlier in the year, the German automaker has taken little heed to customer complaints and refused to recall problematic vehicles until the government steps in. Analysts have attributed Volkswagen’s arrogant behavior in China towards consumers to its leading market position in the car market. The company’s deep-rooted arrogance comes, however, not from its dominating market position. As one analyst points out, VGC’s partner FAW is not a private company, nor a centrally administered automaker. Its real partner is “the central government under the Communist Party.” Over the past 30 years in China, the German automaker has developed a deep-rooted arrogance seen in no other markets because through extensive government relationship and successful lobbying plus advertising power it has been capable of reducing negative media to the minimum. VGC has developed into a tendency of refusing to properly respond to customer complaints unless the government steps in. Unless VGC changes its attitude towards consumers in China, the brand image of Das Auto may be severely damaged in the world’s largest new vehicle manufacturing country. http://www.chinaautoreview.com/pub/CARArticle.aspx?ID=11440