The greater the impact of online content on market sales, the more susceptible the industry becomes to public opinion crises, and even targeted attacks by online black public relations.
In recent years, the new energy vehicle (NEV) sector has become a hotspot for the spread of false information, with virtually no NEV company spared. Drawing on a decade of experience managing public opinion risks in the automotive industry and handling more than 300 product quality disputes, the author aims to share insights and practical approaches with in-house legal professionals in the industry for reference.
Types of public opinion risks
Managing public opinion risks in the automotive industry is particularly challenging due to the interplay of several factors: (1) the public's high expectations for product safety; (2) the complexity of accidents or malfunctions involving multiple causes; (3) the difficulty in explaining technical issues; and (4) the specialised and complex nature of legal matters. These factors collectively give rise to five main types of risks.
Product liability risks. Disputes over the quality of core components, such as braking systems and battery safety, invoke the principle of reversed burden of proof and may trigger punitive damages under article 46 of the Product Quality Law.
Online defamation risks. Issues such as biased conclusions from self-media reviews using varying standards, negative comparisons by automotive bloggers, and commercial disparagement by competitors' hired agents attract attention from potential car buyers. Although articles 1024 to 1028 of the Civil Code explicitly protect reputation rights across various platforms, including news reports, public opinion oversight, literary works and online content, proving malicious intent, actual damages and legal causation requires a high level of evidence-collection skills and expertise from the infringed party.
Risks stemming from public events. Disputes involving car owners' rights protection or conflicts between car owners, manufacturers and dealers frequently escalate into collective legal actions, simultaneously triggering widespread public attention.
Legal disputes among competitors. In the past five years, the industry has seen a rise in cases involving trade secret infringements due to employee mobility, patent disputes, defamation, commercial disparagement, and even administrative complaints related to public interest and unfair competition. These cases combine complex legal issues with high-profile public attention, with dispute amounts escalating from millions to billions of yuan.
Regulatory chain reactions. Major public opinion incidents that garner widespread attention may, within 48 hours, trigger regulatory actions such as special inspections by market supervision authorities or inquiries from the securities regulators.
Approaches to public opinion management
To effectively manage the impact of public opinion, companies should begin by establishing an early warning system to identify potential risks in advance. Public opinion can be likened to a fire: was it caused by arson, negligence or an accident? Has the fire spread to a level requiring urgent intervention? Are the onlookers more inclined to extinguish the flames or fuel them? Is the wind blowing towards the instigators or those trying to put out the fire? Finally, can the "ashes" left in the internet's memory be cleaned up? This analogy helps companies clarify their strategy and respond to public opinion crises with greater composure.
Early warning mechanism. Companies can establish a multi-level early warning system based on the speed of public opinion dissemination, intensity of sentiment and legal relevance. For instance, risks limited to routine after-sales service clauses under the Provisions on the Liability for Repair, Replacement and Return of Household Automotive Products would constitute the lowest level of basic risk.
In contrast, the highest level, a red alert, would involve negative information spreading across the top 50 mainstream platforms within three hours, with more than 85% of the sentiment being negative. Such information would include extreme expressions such as "collective rights protection", "class action" or "criminal accountability".
The company's legal team may assess that the originating incident could trigger offences under article 221 of the Criminal Law for "damaging commercial reputation or product reputation", or article 55 of the Consumer Protection Law for "fraudulent sales". In such cases, the company must activate its most urgent response mechanism, involving its highest-level crisis response team, and be prepared for potential investigations by regulatory authorities.
Legal characterisation. In disputes related to vehicle product liability, data analysis reports provided by technical departments form the basis for responses. Necessary follow-up measures for automakers to clarify facts may include blockchain-based evidence preservation (such as live comments and discussion threads), securing electronic evidence, issuing a company statement, initiating platform complaint procedures, applying to the court for pre-litigation injunctions and filing defamation lawsuits. In cases involving organised online smear campaigns, companies should promptly report the matter to the police.
Company statement. In discussions with various automakers, the author emphasises that a well-crafted company statement can determine the outcome of a public opinion crisis. From the perspective of public opinion dynamics, an effective company statement not only defuses tensions but can also turn a crisis into an opportunity, establishing a positive brand image of efficiency, professionalism and accountability. A poorly executed statement may exacerbate controversies, leaving the market with negative impressions such as doubts about product quality, dishonesty or evasion of responsibility. Instances where company statements have triggered even greater negative public opinion are not uncommon.
A company statement that balances empathy and legal reasoning must integrate two opposing approaches: (1) the media professional's sensitivity to public concerns, emotional resonance and empathetic expression; and (2) the lawyer's precision and evidence-based reasoning. If external legal counsel for automakers can adopt a third-party perspective – seeing oneself through others' eyes – and assist in drafting statements with an impartial view that internal employees may lack, they can better assess whether the statement is appropriate and acceptable to the public. This approach enhances the automaker's ability to formulate effective response strategies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
