China consumer show targets Volkswagen, Nissan, Mercedes

[March 16, 2015]  By Adam Jourdan and Sue-Lin Wong

SHANGHAI (Reuters) - Car makers, including Volkswagen AG, Nissan Motor Co  and Daimler AG's  Mercedes Benz, said they are probing allegations aired late on Sunday by Chinese state TV that the firms oversold repairs and spare parts to drivers.

The annual "3.15" consumer rights day investigative special, similar to CBS network's "60 Minutes" in the United States, also criticized Jaguar Land Rover [TAMOJL.UL] for gearbox problems in some cars.

China is the world's top auto market, and media criticism can dent reputations and drag on sales. iPhone maker Apple Inc <AAPL.O> made a rare apology in 2013 after criticism on the show of its after-sales service.

Mercedes and Jaguar Land Rover are already being probed by China for possible anti-competitive behavior. The Chinese venture of German car maker Volkswagen was fined last year for price-fixing.

Volkswagen, a target two years ago of the China Central Television (CCTV) show, was also criticized in an article ahead of the program for its handling of a recall of its Sagitar model car.

"We have paid close attention to CCTV reporting ... and we sincerely apologize for any inconvenience caused to our customers," said Volkswagen China spokeswoman Larissa Braun.

Nissan's China joint venture said it would set up a team to investigate the allegations and strengthen regulation of its service teams, according to a statement on its official microblog.

Mercedes Benz said it would launch a probe and urged dealers to reform their behavior. Land Rover apologized to its customers on its official microblog and said it was working to resolve the issue.

PIG'S BLOOD

The popular show, which singled out camera maker Nikon Corp last year, also said fast food chain Xiabuxiabu  had used pig's blood as a cheaper substitute for duck's blood - a popular hotpot delicacy.

The firm said in a statement it would investigate the allegations and suspend sales of duck blood products.

Fast-food outlet McDonald's Corp, supermarket chain Carrefour SA <CARR.PA> and home products firm Procter & Gamble Co have also previously come under the show's spotlight.

Some firms have pushed out cut-price deals to consumers in the run-up the event to win over consumers in case they are targeted on the show.

CCTV itself has come under fire in China over the last couple of years, with some consumers rushing to defend its targets or simply changing channels.

But marketing experts said that without damage control the impact of such shows in China could damage companies severely.

"The 3.15 show still packs a punch to the firms targeted, and a poor or flippant response from a targeted company can evoke consumer outrage," said James Feldkamp, chief executive officer of consumer watchdog MingJian.

(Additional reporting by Jake Spring in BEIJING; Editing by Ruth Pitchford and Muralikumar Anantharaman)

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