Mercedes-Benz suspends sales operations at dealership involved in oil-leak scandal in China

Source:Global Times Published: 2019/4/16 13:21:09

In a statement on Tuesday afternoon, Mercedes-Benz said that it has suspended sales operations at the dealership pending an official investigation. If the investigation finds the dealership was engaged in any illegal activity, Mercedes-Benz will cancel the sales authorization for the dealership, it said.

Beijing Mercedes-Benz also said representatives of the company had met with the consumer and helped the consumer and dealership to reach a consensus. 

"We once again express our sincere apologies to our customer for this incident and thank her for her continued trust in the Mercedes-Benz brand," said the statement in Chinese, which was sent to the Global Times.

A local investigative team in Xi'an, capital of Northwest China's Shaanxi Province, has spoken to representatives from Beijing Mercedes-Benz Sales Services Co, the German carmaker's China unit, about an oil-leak scandal that has become a symbol for consumer rights protection, according to media reports on Tuesday.

The team has also started a "full investigation" into actions that potentially violated laws and market regulations such as collecting financial services fees, China Media Group reported, citing local officials.

Local authorities on Tuesday formed a special task force to investigate the oil leak scandal involving a Mercedes-Benz dealership in the city, which has captured widespread attention across the country, according to a report posted on the app of the People's Daily on Tuesday.

This is the latest development in the fallout from the scandal, in which a female consumer alleged that a new Mercedes-Benz car she had just bought started leaking oil even before she drove it out of the dealership in Xi'an. A video clip of the consumer sitting on the hood of the car, crying and complaining about the car has gone viral on Chinese social media.

As the case continues to draw widespread attention, authorities both at the local and central government levels have moved swiftly to probe the incident, which has become a symbol for protecting consumer rights.

The special team in Xi'an will consist of officials responsible for a wide range of areas from quality control to consumer protection and market regulations, according to the Beijing Youth Daily newspaper on Tuesday.

The local taxation authorities in Xi'an have also started to probe the dealership in question for possible tax evasion and other wrongdoings, according to earlier media reports.

Liu Lin, a senior official with the Xi'an market regulator, said that if the dealership is found to have engaged in fraud by selling defective cars, it will be subject to severe punishment, according to a report on the app of the People's Daily.

In Beijing, the China Banking and Insurance Regulatory Commission (CBIRC) announced on Monday night that it had directed its branch in Beijing to launch an investigation into Mercedes-Benz's auto financing unit for possible wrongdoings in collecting financing service fees.

Apart from the oil leak, the female consumer also alleged that she was forced to pay 15,000 yuan ($2,235.04) for financial services and other fees.

In a separate move, Xi'an authorities also announced on Tuesday that it would launch a city-wide crackdown campaign against potential wrongdoings at all dealerships in the city, according to the China Media Group report.

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