Fu Hui: Safety is Business

Security is a profitable business.

At least, in the Chinese car market, this is absolute. Who (person or organization) has the right to judge car safety, who is the biggest beneficiary, just like any other industry. In this small and profitable industry, China's auto consumers have only consumption rights, which is the limit of their power. In addition, they are also burdened with another obligation, so that people or organizations with the right to judge, on the premise of consumers’ profits, issue approvals or judgments on car safety and guide consumers to continue to consume. Every year on March 15, they say the same.

With the going away on March 15, the DSG problems encountered by Volkswagen China and its joint venture partners in China are gradually being melted away. The identification of the safety of the car that consumers drive is ultimately not the end of the consumer. If this is the end result of the event, then it presents the logic that consumers are the tipping points of things. With the intervention of “authorities (or people)”, consumers are gradually marginalized. They are only allowed to exist by "authorities (or people)" when they are needed. When they are not needed, consumers do not exist. In other words, the consumers of Chinese cars are only the foil of the entire incident. Of course, Chinese automobile consumers are indispensable. It is precisely because of their existence that “authorities (or people)” have business to do.

In fact, when many public DSG owners express dissatisfaction with the German automaker and its joint venture partners in China, they have little or no hope for the public to solve the problem. They are dissatisfied because they have no other choice. The dealers at the forefront of the incident also face the same difficulties. To solve the problems that have emerged, they have exceeded their capabilities. With the maximization of benefits, they can only engage with consumers in various types of confrontation. Therefore, in the whole Volkswagen DSG event, Volkswagen China and its joint venture partners, distributors, consumers, authorities (or people) in China, each party has a DSG incident.

The great thing about this matter is that whoever has the final judgment right on this matter can only make this right and he can command his orders to the joint venture partners of Volkswagen China and China. In this way, the business naturally arrives. Of course, the operation of this business is invisible. If you let the consumer see that you are not causing trouble, you lose the face of authority (if it really exists).

However, not all consumers are willing to accept the fact that once they can not see the "hand", and secondly, they have no resources to rely on, so they can only rely on physical strength to express themselves. This is obviously not in line with the current environment. More importantly, it is dangerous. In the end, they have purchased DSG problem vehicles and can only be their own responsibility. If they are happy, Volkswagen China and its joint venture partners in China will upgrade DSG-related software. It is another matter whether this can truly solve the problem. The premise of this happening is that it must not hinder the business of all parties.

After decades of soaking in the Chinese auto market, Volkswagen Chinese companies are well aware of the rules of doing business in China, so after the DSG problem occurred, the whole process was completely Chinese. After nearly three months of operation, Volkswagen China has successfully passed its joint venture partners in China.

In the case of Volkswagen’s business in China, the DSG incident requires someone to take responsibility for it. On June 2, 2012, Volkswagen China CEO Ni Kaiming left the post and his power was transferred to Hechemmann (Jochem Heizmann). Volkswagen China did not directly respond to the DSG incident and personnel turnover. However, some analysts pointed out that the main reason for Ni’s departure was that his way of handling the DSG incident was not approved by the public board. In the solution proposed by Ni Kaiming for the DSG event, Volkswagen China and its joint venture partners in China will “guarantee the quality of the relevant double-clutch transmissions produced before December 31, 2012 from 2 years or 60,000. The length of the kilometers has been extended to 10 years or 160,000 kilometers (whichever comes first). According to this plan, Volkswagen China needs to pay more than 1 billion Euros. This exceeds the acceptance of Volkswagen. If this is the case, Ni Kaiming has undermined the business of Volkswagen in China.

According to some media reports, after the DSG incident, Volkswagen's Chinese companies had differences in the way they handle this crisis. The parties did not reach an agreement on the analysis of controllability of the matter. If this is the case, then this can only indicate that Ni Kaiming has misjudged the safety business of doing cars in China. Since Volkswagen China can pass various resources to stifle the investigation of the DSG incident on the eve of its exposure, there should be a stronger ability to resolve this crisis and pay more than 1 billion euros in costs. This is indeed redundant.

Volkswagen has made every effort to maintain its own interests in the Chinese auto market. However, Chinese cars are unwilling to give up private interests in order to safeguard the rights and interests of consumers. To be sure, this will definitely not be the last "DSG incident." Volkswagen China and its joint venture partners in China can solve problems in this way, so other multinational car manufacturers can certainly follow suit.

Judging from the growth of the Chinese auto market, this business will become increasingly prosperous.