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China state TV targets foreign auto firms
by Staff Writers
Shanghai (AFP) March 16, 2015


China probes top executive of auto giant FAW: watchdog
Shanghai (AFP) March 16, 2015 - China is investigating the top executive of one of the country's biggest automakers FAW, the Communist Party's corruption watchdog said, as a prolonged graft crackdown targets more state-owned companies.

The chairman and party secretary of China FAW Group, Xu Jianyi, had been placed under investigation for "severe" violations of discipline and the law, the Central Commission for Discipline Inspection (CCDI) said Sunday, using a phrase that typically refers to corruption. It gave no further details.

FAW, originally known as First Automotive Works, is China's third biggest automaker with sales of more than three million vehicles last year, according to an industry group.

Headquartered in the northeastern city of Changchun, FAW and Germany's Volkswagen have a passenger car joint venture that produces the Audi brand, among others.

Besides a long career in the auto industry, Xu, now 61, also held government and party posts in Jilin province where FAW Group is based, according to his biography on the company's website.

"As a responsible corporate citizen in today's global economy, we are proud of our success in contributing to the success and prosperity of society worldwide," Xu said in an introduction to FAW on the website.

The group's Shenzhen-listed unit, FAW Car Co., was down 1.50 percent in late morning trading on Monday after news of the corruption probe.

Chinese President Xi Jinping launched a much-publicised drive against corruption after he came to power two years ago, vowing to target both high-level "tigers" and low-ranking "flies".

The CCDI said early this year that it plans to investigate all major state-owned enterprises.

But analysts say China has failed to implement institutional safeguards against corruption, such as an independent judiciary and free media, leaving anti-graft campaigns subject to political influence.

Foreign carmakers in China rushed to make amends on Monday after being targeted by state television in a ritual naming and shaming of firms for alleged misconduct towards consumers.

Jaguar Land Rover, Volkswagen and Mercedes-Benz were among those targeted Sunday by the annual China Central Television (CCTV) programme for World Consumer Rights Day on March 15.

The two-hour show has in the past criticised foreign companies such as Apple, prompting an apology from chief executive Tim Cook in 2013 over customer service and return policies.

This year it took aim at Jaguar Land Rover, owned by India's Tata Motors, over alleged faulty gearboxes in its Evoque SUVs sold in China.

Jaguar Land Rover said it had from January started to offer a software upgrade to address the issue.

"This has brought consumers inconvenience and difficulties, we express our deep apologies," the company said in a statement on its website.

CCTV also said that some foreign carmakers' service centres overcharged for repairs or recommended unnecessary work. It said these included Germany's Volkswagen and Mercedes-Benz, a unit of Daimler.

"We sincerely apologise for any inconvenience caused to our customers," Volkswagen said in a statement to AFP. "We welcome customers to contact us directly should they have any problems with dealer service."

Mercedes-Benz pledged to investigate. "We will immediately open a thorough investigation and urge the relevant dealers to carry out rectification," it said on its verified China microblog.

A joint venture of Japan's Nissan in China responded to similar accusations by saying it would strengthen supervision of after-sales service.

Foreign auto manufacturers are already under pressure in China, the world's largest car market, following a sweeping investigation into alleged monopoly pricing for parts and complete vehicles.

Last year China fined 10 Japanese auto parts firms more than $200 million in total for price-fixing.

But the CCTV programme, which was broadcast live, also singled out some domestic companies, including telecommunications service providers, for failing to prevent calls which could result in fraud.

Industry giant China Mobile said it would investigate the matter, according to a statement posted online.


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