Volkswagen recall crisis in China: To recall 380,000 vehicles due to the DSG defect

By | March 21, 2013

Volkswagen recall crisis in China: To recall 380,000 vehicles due to the DSG defect

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Due to the DSG transmission failure which had been exposed by the CCTV’s Consumer Rights Day Programming, Volkswagen (China) had been required to recall the relevant vehicles according to the “Defective Auto Product Recall Management Regulations”. AQSIQ announced on 20th April 2013 that AQSIQ has received the recall plan from Volkswagen (China) Sales Co., Ltd., FAW – Volkswagen Automotive Co., Ltd., Shanghai Volkswagen Automotive Co., Ltd. which schedules to recall a total of 384,181 defective vehicles starting from April 2 this year.

Background

In 2003, Volkswagen began worldwide promotion of the DSG dual-clutch automatic transmission. DSG dual clutch transmission is divided into two kinds of dry dual-clutch transmission and wet dual-clutch transmission.

In 2008, Volkswagen launch of the DSG recall starting from the North America by recalling about 13,500 vehicles in North America due to the serious problem of the auto DSG dual clutch transmission. The recall is targeting at the 6-speed wet dual-clutch transmission.

This recall triggered the actions from the car owners in China. On September 18, 2009, FAW-Volkswagen, Volkswagen Import Company submitted a recall report to the State General Administration of Quality Supervision, Inspection and Quarantine, to recall some vehicles equipping the DSG: MAGOTAN, imported Audi TT, the imported Volkswagen EOS, CC, R36, R36 Vari-ant, GTI cars and other variety models. the number of vehicles involved was 2,760.

Volkswagen of Germany in November 2009 announced that it would again recall 17,000 vehicles equipped with the DSG transmission models due to Volkswagen DSG gearbox equipment problem. The involved models were Volkswagen Golf, Scirocco, Eos, Jetta and Passat models produced between September 2008 to August 2009.

In 2011, the “DSG” storm erupted again in China, but the problem comes from the 7-speed dry dual-clutch transmission. Under pressure in March 2012, Volkswagen announced to offer a software upgrade service to customers using the 7-speed DSG transmission vehicles but did not initiate a recall.

On May 23, 2012, Volkswagen decided to extend the DSG transmission quality guarantee period. But on December 27, 2012, Volkswagen announced the recall part of DSG fault models in Taiwan. This again triggered anger among customers in mainland of China who received only extended warranty. No doubt that the way of “double standard” handling again lead to obvious dissatisfaction among the mainland customers.

On 15, March 2013, the DSG transmission failure issue was exposed by the CCTV’s Consumer Rights Day Programming reacting to which Volkswagen issued a statement, saying that “the Volkswagen Group (China), Volkswagen (China) Sales Co., Ltd., Shanghai Volkswagen and FAW – Volkswagen attaches great importance to the CCTV’s Consumer Rights Day Programming regarding the DSG problems reported. To enhance customer satisfaction has been our priority and we attach great importance to the report, thus we will contact our consumers to address the problem as quickly as possible.”

On March 16, AQSIQ spokesman Li Yuanping Volkswagen said that the AQSIQ has notified Volkswagen to implement a recall in accordance with the law, the General Administration of Quality Supervision, Inspection will order the recall if Volkswagen does not fulfill the legal obligations. Subsequently, the Volkswagen Group (China), FAW-Volkswagen and Shanghai Volkswagen issued a joint statement saying that the Volkswagen will start the voluntary recall to solve the DSG problem and the recall specific details will be announced shortly.

Analysis:

As this recall will involve a total of 384,181 defective vehicles according to the most updated news, it is for sure that the Volkswagen will have to pay a great cost to cover the wrong decision made by the management of the group in underestimating the bargaining power of the customers in mainland China. Perhaps they should have done a customer survey by asking how the Chinese customers will feel if they receive differentiated handling regarding some auto defects. It has been long that Chinese customer in particular those living in mainland China are really sensitive about being treated differently which must seriously affect their perception of the branding. Now, the greatest loss perhaps is loss of the consumer confidence.

Some social comments are as follows:

“There are no escapes”

“There must be some problems, we can wait until 3.15 each years to get the problems solved”

   ……

Editorial comment:

We don’t know how many more DSG issues are happening every day. But most of us know some problems and so do the manufacturers. The government needs to do more to assist the customers in protecting their rights as well as punishing manufacturers who are reluctant to act according to the highest business ethics.

 

Key Words: DSG problems exposed in CCTV’s Consumer Rights Day Programming, Volkswagen recall crisis in China

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