Volkswagen AG recalls thousands of cars from Chinese Market

Published Date: 12th Oct 2015

VW Recall 2,000 cars in China

Volkswagen has re-called almost 2,000 cars in China. This follows on from the diesel emissions scandal in the US and Europe.

The Chinese environment ministry announced an investigation into VW cars sold in China following the news of the re-call. This comes after the German carmaker admitted installing software designed to cheat emissions tests.

Volkswagen (VW) estimates that 11 million vehicles will need to be re-called and the software updated. VW has offered its "sincerest apologies" to its Chinese customers.

The 1,900 cars mainly VW Tiguan models were all imported into China. This represents a small fraction of the total number of VWs imported by the country.

Analysts say the recall comes at a bad time for the world's biggest carmaker, as the share price is falling and confidence in the VW brand is fading.

"I have so far seen little impact on consumers' confidence and trust in the VW brand [in China], but we need to continue to monitor that," explained Yale Zhang from Shanghai-based Automotive Foresight.

"Their sales are already weak this year thanks to the slowdown in China's general economy.

"If sales took a further beating from the current emissions scandal that would further complicate their position globally following the scandal."

On-going Investigation

VW has already appointed a new chief executive and chairman after the revelations last month that its cars cheated emissions tests in the US, which forced the shake-up at the top.

VW has launched an investigation into the scandal, but new chairman Hans Dieter Poetsch warned last week that answers would take "some time".

VW has set aside £4.8bn to cover the costs of the scandal, but many within the industry believe the final bill could be a lot higher.

Shares in the company recovered slightly last week but are still down more than 20% since the scandal broke in the middle of September.