Passat Produced By VW Joint Venture In China Flunks Safety Test

In late December 2019, managers at Volkswagen headquarters in Wolfsburg realized they might have a serious problem in China, the company's biggest market and ticket to its electric future, Yilei Sun and Tony Munroe reported for Reuters.

Photo Insert: The Volkswagen Passat

Its flagship Passat sedan had fared badly in an unofficial safety test carried out by an insurance industry body that simulated a front-on driver's side collision, a test that's been widely used in the United States for around a decade.

The car was mangled. The crash-test video went viral, attracting millions of views and triggering a social media furor across China, where the German auto king's success is built on its reputation for superior quality and engineering.

Volkswagen was not obliged to do anything - the Passat had passed the Chinese regulator's frontal collision test, the same test that's used in much of Europe, and one that the carmaker and many industry experts believe better reflects driving conditions in China.

Nonetheless, Wolfsburg acted swiftly, according to two people with direct knowledge of the matter. Days after the test results were announced, it assembled a team of dozens of engineers and managers to work with SAIC-Volkswagen, the 50/50 joint venture that makes Passats in China, they said.

In early 2020, that team decided that strengthening metal components should be added to the front of all new Passats and a variety of other models made at the Shanghai-based venture, at a cost of about 400 yuan ($62) per vehicle, according to the sources.

That structural modification, details of which have not been previously reported, would amount to tens of millions of dollars for the hundreds of thousands of vehicles that would be affected at the venture a year, the sources said. It was a significant cost for a company that had said it was trying to trim manufacturing costs in China and globally.

The intervention in the face of online consumer activism underlines the importance of China, the world's biggest car market, and one which Volkswagen is relying on to fund its 35-billion-euro ($42 billion) transition to electric vehicles and make good on its pledge to overtake Tesla Inc. to become global EV leader by 2025.

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