1 of 2. A man walks in front of a company logo outside an Apple store in downtown Shanghai January 24, 2013.
Credit: Reuters/Aly SongSHANGHAI | Fri Mar 15, 2013 2:14pm EDT
SHANGHAI (Reuters) - Technology giant Apple Inc and car maker Volkswagen AG were singled out by state-run China Central Television (CCTV) in its annual corporate malpractice expose.
On its "3.15" investigative special aired late on Friday, CCTV said that Chinese customers were not given the same post-sales service from Apple as it gave to users in other markets.
The report also said that the direct shift gearbox (DSG) transmission, a long-standing issue for Volkswagen, was causing cars to speed up or slow down during driving.
Volkswagen, which plans to almost double production capacity in China to 4 million cars in the next five years, promised action in response to the "3:15" show, whose name refers to the date of World Consumer Rights Day.
"We take this report very seriously and we will quickly make contact with our consumers to resolve the issue," it said on its official Chinese Weibo microblog.
In a statement Apple China said: "Our team is always striving to exceed our customers' expectations, and we take any customer concerns very seriously."
Apple looks to China not just as its main production base, but also to re-energize slowing growth, the result of rising smartphone penetration in mature markets. CEO Tim Cook sees the world's No. 2 economy as virgin expansion territory, and Apple singles out the region in every quarterly results report.
The television show has named and shamed a number of prominent Western companies in the past, hitting the sales and stocks of its targets in a retail market that is forecast to be the world's largest in three years.
Last year "3:15", one of the most widely watched shows in China, singled out fast-food giant McDonald's Corp and French hypermarket chain Carrefour SA for food safety violations.
The companies were forced to apologize and their shares slumped as China's army of half a billion microbloggers unleashed their anger online.
U.S. retailer Wal-Mart Stores Inc. and Korea's Kunho Tire Co Inc also have been blasted by state TV on Consumer Rights Day.
SAFETY CONCERNS
In December, a separate state television report triggered a food safety scare at Yum Brands Inc. restaurants, cutting its China same-restaurant sales by 20 percent in January and February.
Chinese companies have not been spared from scrutiny.
Public concern about food safety, pollution and corporate corruption has intensified over the last few years, after state media exposed malpractice at local firms including web search engine Baidu Inc and milk producer Inner Mongolia Yili Industrial Group Co.
"These TV exposes create the impression that you can't trust that brand," said Torsten Stocker, head of Greater China consumer practice at Monitor Deloitte. "If there's some smoke then maybe there's much bigger fire."
In a bid to preempt any negative publicity on Consumer Rights Day, some companies launched customer-friendly promotions ahead of the TV show. McDonald's will give out free breakfasts on Monday and Wal-Mart launched an "adopt-a-tree" campaign.
But some Chinese consumers said that the revelations from the "3.15" show would nonetheless have a significant impact on their choice of products in the future.
"I think the exposure of these companies makes them hard to believe again, at least I myself will boycott these companies," Sherry Chen, a clerk at DBS bank in Shanghai, told Reuters in the city's affluent financial district ahead of Friday's show.
The show also stirred up vitriol online in China. Within an hour of the broadcast, Apple had been mentioned 50,000 times on popular web microblog Weibo, China's version of Twitter which has more than half a billion users.
While many posts on Weibo were negative, the targeted companies may take solace that some users were not entirely convinced by the "3.15" show, which is a colorful mixture of under-cover footage and pro-consumer song-and-dance routines.
"Tonight's 3.15 hit out against corruption. But the most fraudulent thing at the end of the night was the show itself," posted Weibo user 'Soledad Horse'. "Oh CCTV, can't you try and find some intelligence from now on?"
(Additional reporting by Fang Yan; Editing by Miral Fahmy and Michael Roddy)
