China's Consumer Watchdog Goes After Volkswagen and Apple

China's consumer quality watchdog has asked German carmaker Volkswagen to recall cars with faulty direct-shift gearboxes.

The defective direct-shift gearbox (DSG) transmissions in some models might lead to engine power failures, according to a statement by China's quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). The agency said it has been investigating Volkswagen's DSG transmissions since March 2012.

The agency has also noted that if Volkswagen refuses to fulfill its legal obligations, the company will be forced to recall the defective cars.

On Friday, a TV programme on consumer rights broadcast on state-owned television CCTV criticised the automaker and the US tech giant Apple for their poor after-sales service. Owners of Volkswagen cars in China have experienced problems including abnormal vibration, loss of power and sudden acceleration, according to the broadcaster.

Following the report, Volkswagen's China division wrote on its official microblog that the company will take necessary steps to resolve the problem.

Christoph Ludewig, the company's Beijing-based spokesman, told Bloomberg that it will implement a voluntary recall in connection with the direct-shift gearbox issue. It will announce the recall details later.

In May 2012, the biggest carmaker in Europe had agreed to extend its Chinese customers' warranty for an automatic transmission technology to 10 years in response to complaints.

China has become stricter with its consumer protection laws, enabling the AQSIQ to order investigations and impose fines if manufacturers and importers fail to recall faulty products in a timely manner.

In the CCTV programme, the iPhone maker was criticised for adopting different repair and return policies in China. The programme also made other allegations against foreign companies, including food retailer McDonald's and supermarket chain Carrefour.