When China’s central television agency CCTV revealed in an expose that Volkswagen cars being sold in the country contained faulty gearboxes, the company faced a massive public relations crisis. Volkswagen is the market leader in China, and the allegations threatened to derail its double-digit annual growth in the vastly appealing emerging market. Instead, its response provides a template for other multinational firms operating in China, as well as a lesson that the company itself continues to take to heart in all its customer communications.
To start, when confronted unexpectedly with the news report, Volkswagen Group China’s newly named vice president of PR & Communications responded promptly and sincerely with an apology. Although the fault with the gearboxes had little potential to be dangerous to drivers, the flaw represented an inconvenience that troubled these consumers, so Volkswagen was quick and honest in apologizing for letting down its customers. Such a move was particularly effective in China, where consumers consider corporate attitudes of primary importance.
Following the apology, Volkswagen issued an immediate recall and replaced all faulty gearboxes for free. It also provided complementary software upgrades when necessary. In the meantime, other executives continued to apologize, demonstrating that the company was taking full responsibility for any failure.
Learning from her ongoing interviews with journalists about the failure and recall, the vice president of PR & Communications also told the executive board in Germany that it needed to revise its approach to the Chinese market, to avoid being perceived as too arrogant. Because the company already had the top market position, customers viewed press releases touting its sales achievements as bragging. Seeking to establish a more humble image, communications by Volkswagen China Group shifted to emphasize more human elements, such as its continued campaign to increase the uses of child safety seats. In addition, all marketing communications for China are now written initially in Chinese and, if necessary, translated into English, rather than the other way around, which had been the standard.
Some of these elements are global; a product safety issue demands an apology and a recall, no matter where it takes place. But Volkswagen’s experience also recommends some specific traits of marketing communications in China, including humility, personification, and deep sincerity.
Angela Doland, “How Volkswagen Overcame a Crisis in China, in Three Lessons,” Advertising Age, August 14, 2014, http://adage.com