Volkswagen is facing the wrath of its customers in China. On Sunday, several hundred unhappy car owners gathered in 60 different locations across the country to protest against bad quality and discrimination against Chinese buyers.
“We demand fairer treatment,” says one banner, as shown on an anti-VW forum on the Internet.
A motorcade of demonstrators blocked the entrance to a VW dealership in Sichuan province. “This business is unscrupulous,” yelled one of the protest leaders.
Customers are accusing Volkswagen of not doing enough to make their cars safe. There have been some rare cases of fatigue cracks in the rear torsion crank axles – but only with cars that had previously been involved in rear-end collisions.
The company initially notified over 580,000 owners of the New Sagitar and Beetle models, and invited them to come into the garages and have their cars strengthened, by affixing metal brackets to the problem area. After none turned up, the government then issued a compulsory recall, which will begin in February next year.
"If there has never been a collision, the axle is safe", says Jochem Heizmann, head of Volkswagen China. "With our recall, we are making a safe concept even safer."
As a gesture, the company will extend the warranty to 10 years on the affected parts, which also helps to protect customers from value loss with their cars.
However, the Chinese owners are not convinced. “I always have to worry that my rear axle may break at any time,” wrote one family man on an Internet forum. “The only acceptable solution would be a newly installed rear axle.”
These protests are a serious PR problem for Volkswagen China. In the country where it sells one in every three of its cars, the recall sends a strong message that there is something wrong with the quality. Numerous media outlets in China have spread an image of VW as greedy and careless, and the subject is a hot topic on car lovers' websites.
"Chinese customers and the media critisized Volkswagen for cutting corners and treating Chinese consumers unfairly", says He Lun, editor of the influential Beijing-based publication "Auto Weekly."
"VW chose to be silent over such claims and allowed various online outlets to form a so-called professional consensus about the case."
It’s hard to say what will happen with the Sagitar recall because the controversy is still brewing. He Lun, Editor, Auto Weekly China
According to the online consensus, the independent suspension was the original design for the car and the change to a different suspension was made specifically to make more profits on the Chinese market.
"The success Volkswagen has enjoyed in China in the last 30 years has been phenomenal, but the harm it has done to itself has also been extraordinary," said Mr. Lun. "It’s hard to say what will happen with the Sagitar recall because the controversy is still brewing."
Protests and public assemblies in China require government permission, which is why the protests would not have taken place last week during the APEC conference in Beijing. While the Chinese government cannot be accused of orchestrating these protests, it certainly tolerated them.
In general, the government wants to have more Chinese cars on the road, so it will not actively hurt Volkswagen – that would mean hurting VW’s Chinese joint venture partners, FAW and Shanghai Volkswagen too – but it won’t go out of its way to save the company either.
In fact, part of Volkswagen’s ongoing entrenchment in China is due to how well it complies with all government requests, including setting up a factory in the north-western Xinjiang region in 2013.
Finn Mayer-Kuckuk is the Handelsblatt correspondent in Beijing. To contact the author: [email protected]