A Mercedes-Benz dealership in Xi’an in northwest China’s Shaanxi Province has been fined a total of one million yuan (US$145,000) for selling a defective product and misleading customers.
A woman bought a new Mercedes from the Lizhixing 4S dealership, an authorized dealer in Xi’an, only to discover that the engine was leaking oil when she first drove it.
A video was posted online showing her sitting on the hood of a car in the showroom angrily accusing sales staff of dodging her demands for a refund. She also alleged in media interviews that she originally wanted to pay cash for the car but was pressured by the dealership into taking out a loan which came with high fees.
The two sides finally reached an agreement last month after local authorities got involved.
The local market regulatory released the results of their investigation on Monday and said that an examination by an authorized testing institute confirmed the vehicle had an existing problem when it was sold.
The report showed a bolt was left in the engine during assembly, which broke the engine block, causing the oil leak.
The market watchdog fined Lizhixing 500,000 yuan for breaches of safety regulations.
The investigation also found that the dealership had misled customers into taking out loans with “financial service fees” on top and fined the company a further 500,000 yuan.