FAW-VW takes measures to prevent its dealerships from overcharging Chinese customers

Gasgoo.com (Shanghai July 1) - An internal document recently forwarded from FAW Volkswagen to its dealerships has gained the attention of many in the industry. In the document, FAW-VW explicitly prohibits dealerships from raising fixed prices on its models. Several commentators, including the Nanfang Daily, which reported on the story earlier this week, speculate that the document is the joint venture's way of responding to public allegations of price control by its dealerships.

According to the document, FAW-VW dealerships must sell any VW vehicles at the manufacturer's set price, and are banned from forcing consumers to purchase optional features or services they do not wish to buy. The documents specifically mentioned the CC and Golf, both popular models in the country. Any dealerships found to disobey the policy would be forced to compensate affected customers twice the amount overcharged within three working days. In certain instances, FAW-VW will go as far as suspending the dealership's commission for the remainder of the quarter. Dealerships may also see their ranking in the FAW-VW sales network negatively affected.

Many believe that FAW-VW announced the new policy in order to quell government suspicions that dealerships were illegally raising the prices of popular models. Price differences between several models among the JV's dealers in the north and south of the country have attracted a great deal of attention. Several models, including the new Magotan, CC and Golf, are considerably more expensive in FAW-VW dealers the north of China than those in the south. Consumers and industry analysts both have applauded the JV's decision to prevent illegal price raising in a tough market where making sales is considerably difficult.