Volkswagen’s campaign to recall more than 384,000 vehicles in China to deal with a gearbox failure could cost the German car manufacturer over $600 million, reports Automotive News Europe. The models included in the campaign are the imported VW Golf, Scirocco and Audi A3, and the locally produced Magotan, Sagitar, Bora, Golf 6 Touran, Passat and Lavida according to Chinese authorities for quality control.
VW representatives declined to comment on costs of the recall, but the market analysis company LMC Automotive estimates that it could range from 3,000 yuan ($483) and 10,000 yuan ($1,610) per vehicle. The recall campaign is a blow for VW, for which China is the largest market, as the group aims to become the largest automobile manufacturer in the world by 2018.
Recalls were announced less than a week after China’s state television aired a show where VW customers complained of abnormal vibration, power failure and sudden acceleration of cars equipped with the DSG gearbox.
President of consulting company Synergistics, Bill Russo, said that problems like this are always damaging a company’s reputation, especially if they become public. The campaign includes 21 types of vehicles, including versions of the VW Scirocco, Bora, Touran, Passat and Skoda Octavia produced since 2008.
China Quality Control Authority concluded after a year-long investigation that a fault in the DSG gearbox manufactured by the German group, which does not require a clutch, can cause engine failure and hidden safety risks. The German group said it would replace for free the defective components of gearboxes.
Volkswagen, the biggest European carmaker, sold 2.8 million vehicles last year on the Chinese market, up 25% from the previous year, with a production of 2.6 million units in China.
Volkswagen announced last week it will build in the next few years 6 to 7 new factories in China, in addition to the 12 already in place, to reach in 2018 a production of more than 4 million vehicles per year.
China is the largest car market in the world since 2009.
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