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Recall in China Could Cost VW More Than $600 Million
Volkswagen AG's recall of 384,200 cars in China to replace defective transmissions could cost the company as much as $611 million, Bloomberg News reports.
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Volkswagen AG's recall of 384,200 cars in China to replace defective transmissions could cost the company as much as $611 million, Bloomberg News reports.
The news service cites IHS Automotive, which estimates expenses of 3,000 yuan-10,000 yuan ($478-$1,590) per vehicle.
China's General Administration of Quality Supervision, Inspection and Quarantine, which ordered the recall, says the campaign involves a wide variety of VW models produced since 2008 that are equipped with a direct-shift gearbox. The agency says a malfunction of the DSG electronics may cause the vehicle to lose power, thus posing a safety threat.
Consumers also have complained about unintended acceleration and excessive vibration in those cars.
In May 2012 the company extended the warranty on nearly 1 million DSG-equipped vehicles in China to 10 years from two. VW said at the time that the system's problems, which included noise, vibration and failure to start in hot or humid weather, were not safety risks.
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