By Pei Li and Adam Jourdan
BEIJING/SHANGHAI (Reuters) - China's annual consumer day TV show took aim at Volkswagen and the country's fast-growing bike-sharing market on Thursday in an otherwise subdued outing for the once feared event.
The late evening China Central Television (CCTV) show named and shamed the German carmaker for engine defects with its Touareg SUV, prompting an apology from the company as it looked to salve consumer concerns in the world's largest auto market.
"We sincerely apologise again for any inconvenience and concern this issue may have caused our customers," Volkswagen said in a statement, adding it had already filed a recall plan in China related to the issue.
The show, known as "315" in reference to global consumer rights day on March 15, has snagged a number of major names. Last year, it turned its spotlight on U.S. sports brand Nike for misleading advertising.
Volkswagen itself has been targeted before - in 2015 for overselling repairs and spare parts to drivers and in 2013 over a gearbox transmission issue.
China's bike-sharing industry, which has boomed since 2016 backed by huge venture capital funding, was also criticised on the show after a number of smaller firms went under and failed to pay back deposits to users.
Companies are, however, becoming more savvy at deflecting criticism, with public relations teams set up in advance to respond if they are targeted.
"It's definitely tougher now to do this show. Many firms start taking precautionary measures half a year in advance," said a person close to the show, who declined to be identified as he was not permitted to speak to the media.
However, while the two-hour evening show, an eclectic mix of undercover reports and song-and-dance, has lost some of its bite, companies and PR firms were not letting their guard down.
"We have to take precautionary measures in advance and be on high alert," said Guan Huizhu, Shanghai director of public relations firm Allison & Partners.
And of late, Beijing has grown increasingly bold at grilling firms not just over issues of quality and safety, but also behaviour that it sees as clashing with the ruling party's socialist values.
In the last few months, Marriott International has been forced to apologise for referring to Taiwan and Tibet as countries, while Daimler's Mercedes-Benz also landed in hot water for quoting the Dalai Lama in an Instagram post.
"Consumers have the right under the law to be respected," said Chen Yinjiang, deputy secretary general of China Consumer Protection Law Society.
The person close to the show added CCTV reporting teams would start undercover investigations around October and that the process was very secretive to avoid the names of targets being leaked.
"Everybody has to sign a non-disclosure agreement once they join the show," he said.
CCTV did not immediately respond to a request for comment.
Many companies will also roll out goodwill gestures like free giveaways around the day to soften any blow, just in case they are named and shamed
"All eyes are focused on how the companies that are called out, especially the big ones, will respond," said Guan.
(Reporting by Pei Li and Norihiko Shirouzu in Beijing and Adam Jourdan in Shanghai; Editing by Edwina Gibbs and Mark Potter)
Disclaimer: No Business Standard Journalist was involved in creation of this content
