Mercedes-Benz，one of Chinese HNWIs’ favourite car brands, has come under fire in China after a woman staged a showroom protest. Local authorities launched an investigation after a video of the 30-year-old customer, surnamed Wang, went viral on social media and some official communication channel of Chinese authorities.
Oil Leak In the Very First Drive
In a picture taken on-site, the female buyer sat on the bonnet of a car in a Mercedes-Benz dealership in Xian, Shanxi province, and complained about the unfair treatment she experienced.
Wang, who picked up her 660,000 Yuan (around AU$139,000) car from Xian Lizhixing Auto on March 27, 2018. According to her, the car alerted her to an engine oil leak the first time she drove it.
In the following two weeks, the dealer changed its position on her complaint several times, she told her audience on Weibo. She said she was promised a new car, then they changed their mind and offered a refund, and eventually just offered a new engine.
In the video taken on-site, which was filmed on April 9, she said she was forced to stage a protest because her efforts to protect her consumer rights failed.
“I’m an well-educated person, with a master degree. But this incident is humiliating. I now know I should not have tried to bargain with them,” she said. “I would not be doing something shameful like this if I thought we could still discuss this reasonably.”
Financial Service Fee As An Unwritten Condition?
The customer said she wanted to buy the car with cash but was persuaded to take out a low interest loan which involved a “financial service fee” of more than 15,000 yuan (US$2,240).
Market regulators in Xian, Shanxi’s provincial capital, started an investigation into the case after it blew up a storm online. Eventually negotiations between the dealership and the customer failed, the Xian government’s publicity department said on Weibo.
Wang refused a refund and wanted a replacement, it said. The dealer said it proposed a settlement to the customer, but she refused.
After the incident went public, Mercedes-Benz China apologized and said it had sent a team to Xian to try to mediate between the customer and the dealer.
The customer says she felt that her protest in the showroom was a humiliating last resort.
In an interview with Central China Television, the car company said it had always complied with the law and never charged dealers or buyers for financial services.
Wang said attempts to involve the authorities failed and she decided to use social media. She said showroom staff objected to her protest and she told them: ‘You can either call 110 [police] or the industrial and commercial bureau.’
“I wish I had an opportunity to be detained. I wish more people would learn about all this.” Wang’s video aroused heated discussion online, with many people echoing her frustration in seeking help from the relevant institutions.
“An ordinary person’s reasonable pursuit to protect her rights cannot get attention until she goes to the internet and shows users an extreme action. This is pathetic,” one Weibo user commented. —-Edited from Mandy Zuo, SCMP
The Mysterious ‘Forced Financial Fee’
As a result of the pressure from public opinions, Xian Lizhixing Auto agreed to provide a replacement car and refund 15,000 yuan it charged her for financial service fees on the loan she took out to buy her CLS 300, Thepaper.cn reported.
Mercedes-Benz representatives witnessed the signing of the agreement and invited Wang to visit the company’s production base in Germany.
It also said the brand had suspended the showroom’s license. ‘We are launching a compliance investigation of the dealer,” Mercedes said. “Before the conclusion is made, we decided to suspend the showroom.’
“If any practice of this dealer is found to have violated regulations or compliance rules, we will terminate its showroom license.” Mercedes-Benz China apologises to the customer who staged showroom protest over oil leak from new car.
After her video blew up a storm on the internet, market regulators in Xian, the capital of Shanxi province, launched an investigation, according to a report on the People’s Daily.
The tax authorities said they were checking Lizhixing Auto’s affairs, while the China Banking and Insurance Regulatory Commission asked its branch in Beijing to investigate whether Mercedes-Benz China’s financial business had charged other customers service fees through its dealers, state news agency Xinhua said.
Wang actually met the general manager of the showroom, who was not named in media reports, in the presence of market supervisors. The negotiations failed because Wang said she felt the dealer was arrogant and lacked sincerity.
In the agreement, Wang was also offered a decade-long one-on-one VIP service and a belated birthday celebration. She turned 30 during the week-long protest.
“I think everybody, whether it is a big company or an individual, has rights to have dialogue on an equal basis,” Wang told Thepaper.cn.
“In the past, they did not treat me equally. Perhaps they thought they are a big company and I am just nobody,” she said. “Now, I am receiving so much attention from internet users. This result is probably not what I expected, but I am satisfied with it.” —Edited from Alice Yan, SCMP
Inviting her to visit the German factory and celebrating her birthday showcases the company’s humanistic treatment of customers, Wang said, adding the result of the agreement was beyond her expectations and thus she was very satisfied.
Chinese Netizens and Authorities Made Sure Rights Safeguarded
Representatives apologized again to Wang and promised to actively cooperate with relevant departments in any investigation.
Local market regulators paid great attention to the issue and played an active role in resolving the issue, said Liu Lin, Deputy Director of the Gaoxin Branch of the Xi’an Municipal Market Supervision Bureau.
Based on the agreement, the bureau will continue to strengthen law enforcement and crack down on illegal behavior, Liu said.
Consumption has become the primary driving force for China’s economic development, and keeping consumers satisfied in all industries can further promote high-quality development in this rising economy. — Edited from Yang Yang, Chinadaily
But viewing from an opposite angle, with the recent decades of massive urbanization, huge Chinese rural population migrated into cities and become regular consumers of industry products and FMCG. In China, thus for the car dealers, it was usually a sellers’ market, where consumers pursue luxury products but not necessarily pay attention to their rights. The Mercedes-Benz incident reflects not only the progression of consumer rights in China, but also for the luxury brands, the ‘easy profit’ days may have been over.
Edited by Joreal Qian