COMPLAINT NUMBER 16/187

COMPLAINANT P. McGill and T. Morris

ADVERTISER SsangYong New Zealand

ADVERTISEMENT SsangYong Website and Television

DATE OF MEETING 9 August 2016

OUTCOME Website: Upheld, TVC: Not Upheld

SUMMARY Advertisement 1: The SsangYong NZ website (www.ssangyong.co.nz) advertisement promoted the SsangYong Actyon Sport Ute and claimed it had a 4-star KNCAP rating. Complainant, P. McGill, said the website advertisement was misleading as it claimed the vehicle had a 4-star safety rating but it was a KNCAP rating (Korean safety rating) not an ANCAP rating (Australian safety rating). The Complaints Board held that as no substantiation had been provided to support the claim the 2016 SsangYong Actyon Sport Ute had a 4-star KNCAP safety rating, it was likely to mislead consumers and ruled the complaint about the website was Upheld. Advertisement 2: The SsangYong Tivoli television advertisement showed a man asking people in a boardroom about the vehicle, stating, in part: “Tivoli. Why do we love it?” The people come up with various suggestions, including: “5-star safety” to which the man replied “I love it!” Complainant, T. Morris, said the television commercial for the SsangYong Tivoli was misleading as is was not clear to consumers it was a 5-star KNCAP rating, not a ANCAP rating. The majority of the Complaints Board said a reference to the rating being KNCAP would have been beneficial to consumers, but it also took into account the brevity of the 15 second commercial and likely consumer purchasing behaviour. While the majority noted the Complainant’s opinion the advertisement should have used the ANCAP rating as it is the only rating fit for New Zealand purposes, it said the claim was substantiated and it was not misleading.

In accordance with the majority the Complaints Board ruled the complaint about the television advertisement was Not Upheld.

[Website advertisement to be removed] Please note this headnote does not form part of the Decision.

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COMPLAINTS BOARD DECISION The Chair directed the Complaints Board to consider the advertisements with reference to Basic Principle 4, Rule 2 and Rule 3 of the Code of Ethics. This required the Complaints Board to consider whether the advertisements contained any statement or visual presentation or created an overall impression which directly or by implication, omission, ambiguity or exaggerated claim is misleading or deceptive, was likely to deceive or mislead the consumer, made false or misleading representation, abused the trust of the consumer or exploited their lack of experience or knowledge. (Obvious hyperbole, identifiable as such, is not considered to be misleading). The Complaints Board was also required to consider whether the advertisements had been prepared with a due sense of social responsibility to consumers and society. The Complaints Board also noted the advertisements were to be considered under Principle 1 of the Code for Advertising Vehicles which said “Advertisements should comply with the laws of New Zealand”. The Complaints Board confirmed that all advertising should comply with the laws of New Zealand, however, the Advertising Standards Authority was not the appropriate body to consider any legislative breaches and therefore, declined to adjudicate on whether the advertisements before it complied with the laws of New Zealand. The Complaints Board ruled the complaint from P. McGill was Upheld and the complaint from T. Morris was Not Upheld. The Complaints Board then noted the Complainants, P. McGill and T. Morris had similar concerns about the use of the KNCAP safety rating used in the SsangYong advertisements. It said as the advertisements were from different mediums, one being television and the other a website, and concerned different vehicles, the complaints would be considered separately. Advertisement 1: SsangYong New Zealand website. Complainant, P. McGill, said the website advertisement for the SsangYong Actyon Sport Ute was misleading as it claimed to have a 4-star safety rating but is was a KNCAP rating (Korean safety rating) not an ANCAP rating (Australian safety rating). The Complainant said, in part: “the Acton Ute only had a 3 star ANCAP safety rating! So SsangYong are hiding the NZ safety rating which is lower than the KNCAP rating which they have decided to use… I think this is really rough for people who don't understand the systems and difference between a ANCAP and KNCAP (non approved).” As part of its consideration the Complaints Board sought clarification from the New Zealand Transport Authority (NZTA) regarding the status of NCAP ratings in New Zealand. NZTA responded, in part: “With regards to the differences between the KNCAP and ANCAP rating systems… there are significant differences between KNCAP testing and ANCAP testing... No comprehensive work has been done to compare how tough the current ANCAP protocols are in comparison with the current KNCAP protocols, but a recent result for a different model tested by both programs appears to indicate that the ANCAP assessment protocols may be more challenging.” The Complaints Board noted the information supplied by NZTA was provided to the Advertiser for comment. The Advertiser responded that it was waiting further information from KNCAP and SsangYong Korea in relation to some of the comments made by NZTA but

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as the complaints were about the use of KNCAP in general they should be considered on that basis. The Advertiser responded that “ANCAP crash testing results are not available for NZ specified SsangYong vehicles. ANCAP have simply not completed any testing on our product for a number of years. ANCAP testing is a consumer based testing program, and not mandatory. I would assume ANCAP have not completed any testing as SsangYong sells very few vehicles in the Australian market. KNCAP is the Korean New Car Assessment Program – an organisation owned by the Korean Government, and is mandatory for all new Korean domestically manufactured models. KNCAP is tested to a higher standard than ANCAP”. The Complaints Board held that as no substantiation had been provided to support the claim the 2016 SsangYong Actyon Sport Ute had a 4-star KNCAP safety rating, it was likely to mislead consumers. The Complaints Board agreed the Advertiser was entitled to promote the KNCAP safety rating of a vehicle so long as it was accurate and able to be substantiated. It acknowledged that ANCAP and KNCAP used different methods of testing and disagreed with the Complainant’s assertion that ANCAP was the only “NZ approved” safety rating. The Complaints Board said while ANCAP was the preferred safety rating in Australia and New Zealand due to testing being conducted for specific driving conditions in those countries, it was voluntary. The Complaints Board said as the website advertisement was clear in identifying the safety rating was a KNCAP rating it was unlikely the consumer would be misled into thinking it was an ANCAP rating. However, as the Advertiser had provided no substantiation to support the claim the 2016 SsangYong Actyon Sport Ute had a 4-star KNCAP safety rating the Complaints Board found the claim was misleading and the advertisement used test results in way that was misleading. The Complaints Board ruled the advertisement was in breach of Rules 2 and 3 of the Code of Ethics and had not been prepared with a due sense of social responsibility required by Basic Principle 4 of the Code of Ethics. The Complaints Board ruled the complaint made about the 4-star KNCAP rating on the SsangYong New Zealand website was Upheld. Advertisement 2: Tivoli television commercial. T. Morris said the television commercial for the SsangYong Tivoli, which said in part: “Tivoli. Why do we love it? … 5-star safety, I love it” was misleading as it was not clear to consumers it was a KNCAP rating, not a ANCAP rating. The Complainant said the advertisement was misleading as “upon researching further, I found that the ‘5-star safety’ claim is referring to a KNCAP rating (Korean NCAP) a safety ratings system that is not recognised in NZ. The safety ratings system used in NZ is ANCAP. The KNCAP assessment program differs significantly from ANCAPs and is not suitable as a measure for safety in NZ.” The Complainant also asserted that SsangYong had not had their vehicle ANCAP test purposefully and KNCAP had an inferior testing methodology. The Advertiser responded, in part: “In New Zealand, use of NCAP ratings are purely consumer ratings - similar to a consumer based rating for a toaster. Of course we would use a ANCAP rating if one were available, however the Tivoli has not been released in Australia. I’d also like to point out that our Tivoli won the ‘safest car in Korea’ award in 2015.

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There is often confusion around ANCAP and other crash rating programs. Many NZ Consumers believe ANCAP to be a mandatory test. To clarify, under NZ law, vehicles must comply with all standards defined in the suite of NZ Land Transport Rules. For light vehicles, there are 21 different Rules (regulations) that vehicle must comply with. The New Zealand Transport Agency (NZTA) oversees the approval process and each distributor has statutory responsibilities to report to the NZTA against these standards. Each distributor must, prior to a vehicle being first sold, undertake a pre-delivery inspection of every vehicle to validate the vehicle complies with the Rules and standards set under Rules. As such all LDV and SsangYong vehicles comply with NZ’s standards as can be shown in the company’s statement of compliance. The above process should not be confused with ANCAP ratings. ANCAP (or other new car assessment ratings such as Euro-NCAP, JNCAP etc) are not required under NZ law (or under the laws of other countries). These are a consumer test to rate the relative performance of car in a stimulated crash test…But they are not key to or essential in determining a vehicles safety for use of NZ roads. These are determined by NZ legislation and the Land Transport Rules pursuant to our legislation.” The Complaints Board noted the response from the Commercial Approvals Bureau (CAB) on behalf of the Media, which stated, in part: “the proposition that Korean safety ratings are somehow ‘less legitimate’ than their Australian or European counterparts is deeply troubling for reasons that should be apparent. The commercial does not mention an ANCAP rating, therefore it cannot be said to deceive or misled. Further to this, the complainant and indeed any other New Zealander or interested consumer can freely search the ANCAP database to find the Australian safety rating for any new car.” The Complaints Board turned to consider whether the reference to “5-star safety” in the advertisement was likely to mislead consumers. Noting the various issues about the status of both regimes, the Complaints Board confirmed it was not its role to assess or compare the validity of either testing regime and reiterated that, while ANCAP was the preferred and widely used safety rating in New Zealand it was voluntary. It said the Complaints Board was required to consider the likely consumer take-out of the advertisement and whether it reached the threshold to affect a breach of the Advertising Codes. A minority of the Complaints Board was of the view that, without a qualification the safety rating was KNCAP, the statement “5-star safety” was misleading. It said most consumers would assume it was a New Zealand issued rating and there was nothing in the advertisement which signalled it was a Korean safety rating. The minority said the claim “5-star safety” was likely to mislead consumers and the advertisement was in breach of Rules 2 and 3 of the Code of Ethics and had not been prepared with a due sense of social responsibility to consumers and society required by Basic Principle 4 of the Code of Ethics. The majority of the Complaints Board said the reference to “5-star safety” did not reach the threshold to be considered to mislead consumers. It said most consumers were unlikely to purchase a vehicle without careful consideration of a range of factors and it was not generally an item brought impulsively. It said the advertisement was clearly promoting the various benefits and features of the vehicle and took into account it did have a 5-star KNCAP rating, which had been substantiated by the Advertiser. While it agreed that a reference to the safety rating being KNCAP would have been beneficial to consumers, it also took into account the brevity of the 15 second commercial and likely consumer purchasing behaviour.

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While the majority noted the Complainant’s view the advertisement should have used the ANCAP rating as it was the only rating fit for New Zealand purposes, it said this did not make the advertisement before it misleading. The majority of the Complaints Board ruled the television advertisement was not in breach of Rules 2 and 3 of the Code of Ethics and had been prepared with a due sense of social responsibility required by Basic Principle 4 of the Code of Ethics. In accordance with the majority, the Complaints Board ruled the complaint about the television advertisement was Not Upheld. DESCRIPTION OF ADVERTISEMENT Advertisement 1: The SsangYong NZ website (www.ssangyong.co.nz) advertisement promoted the SsangYong Actyon Sport Ute and claimed it had a 4-star KNCAP rating. Advertisement 2: The SsangYong Tivoli television advertisement showed a man asking people in a boardroom: “Tivoli. Why do we love it?” The people come up with various suggestions, including: “5-star safety” to which the man replied “I love it!” COMPLAINT FROM P. MCGILL I saw an ad online advertising the Ssangyong Actyon Sport Ute and proceeded to their website to read the full offer. Safety is really important to me and I noticed the ute had a 4 star safety rating. When I went into the Ssangyong dealer in Takanini the dealer told me that this wasn't a ANCAP safety rating but a KNCAP which is apparently a Korean safety rating not a NZ approved rating. Going back to the Ssangyong website i saw he was right - it has a "4 star KNCAP rating" http://www.ssangyong.co.nz/actyon-sports/ When i then checked the ANCAP rating on the ANCAP website I found that the Acton Ute only had a 3 star ANCAP safety rating! So Ssangyong are hiding the NZ safety rating which is lower than the KNCAP rating which they have decided to use. I think this is really rough for people who don't understand the systems and difference between a ANCAP and KNCAP (non approved). http://www.ancap.com.au/safety-ratings/ssangyong/actyon-sports/717107 I dont think companies should be able to hide low safety ratings and try and promote ratings from other countries because it's suits them. COMPLAINT FROM T. MORRIS I've recently seen an ad on TV for the SsangYong Tivoli. The TV commercial clearly refers to "5 star safety". Upon researching further, I found that the "5 star safety" claim is referring to a KNCAP rating (Korean NCAP) a safety ratings system that is not recognised in NZ. The safety ratings system used in NZ is ANCAP.

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The KNCAP assessment program differs significantly from ANCAPs and is not suitable as a measure for safety in NZ. SsangYong have deliberately not submitted their vehicles to ANCAP for testing and thus are "unrated" for safety in NZ. They are getting around this by using an inferior, not fit for NZ purpose, rating from a non-recognised safety testing regime outside of NZ - KNCAP. I believe this is extremely misleading to NZ consumers to advertise "5 star safety" when the vehicles they are promoting are actually "unrated" in NZ. CODE OF ETHICS

Basic Principle 4: All advertisements should be prepared with a due sense of social responsibility to consumers and to society. Rule 2: Truthful Presentation - Advertisements should not contain any statement or visual presentation or create an overall impression which directly or by implication, omission, ambiguity or exaggerated claim is misleading or deceptive, is likely to deceive or mislead the consumer, makes false and misleading representation, abuses the trust of the consumer or exploits his/her lack of experience or knowledge. (Obvious hyperbole, identifiable as such, is not considered to be misleading). Rule 3: Research, Tests and Surveys - Advertisements should not use tests and surveys, research results or quotations from technical and scientific literature, in a manner which is misleading or deceptive

CODE FOR ADVERTISING VEHICLES

Principle 1 - Advertisements should comply with the laws of New Zealand.

RESPONSE FROM ADVERTISER, SSANYONG NEW ZEALAND RE: Complaint 16/187 Mr. P McGill is complaining that SsangYong has advised a KNCAP safety rating of four stars, instead of using an ANCAP rating. I’m pleased provide the following facts: ANCAP last tested the Actyon Sports in 2008 – a previous generation model to what we currently supply and sell in NZ. Add to that, the Australian model tested is completely different to the models we specify for the NZ market. Here’s a picture of a 2008 Actyon, and a 2016 Actyon for your reference. 2008 Actyon

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2016 Actyon:

ANCAP crash testing results are not available for NZ specified SsangYong vehicles. ANCAP have simply not completed any testing on our product for a number of years. ANCAP testing is a consumer based testing program, and not mandatory. I would assume ANCAP have not completed any testing as SsangYong sells very few vehicles in the Australian market. KNCAP is the Korean New Car Assessment Program – an organisation owned by the Korean Government, and is mandatory for all new Korean domestically manufactured models. KNCAP is tested to a higher standard than ANCAP. Please see the attached NCAP guide supplied by GLOBAL NCAP, which shows the various NCAP programs around the world, and their test parameters. Please see the attached letter from the NZ Motor Industry Association (organisation representing all new vehicle manufacturers in NZ). This letter outlines the use of ANCAP and other NCAP programs in New Zealand. RE: Complaint from T. Morris – KNCAP rating on Tivoli T. Morris is complaining about the use of 5 star KNCAP rating on our Tivoli advert. As per the previous complaint (listed above) KNCAP is tested to a higher standard than ANCAP. In New Zealand, use of NCAP ratings are purely consumer ratings - similar to a consumer based rating for a toaster. Of course we would use a ANCAP rating if one were available, however the Tivoli has not been released in Australia. I’d also like to point out that our Tivoli won the “safest car in Korea” award in 2015. Please see the attached documents as supporting information.

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General information around vehicle safety standards in NZ: There is often confusion around ANCAP and other crash rating programs. Many NZ Consumers believe ANCAP to be a mandatory test. To clarify, under NZ law, vehicles must comply with all standards defined in the suite of NZ Land Transport Rules. For light vehicles, there are 21 different Rules (regulations) that vehicle must comply with. The New Zealand Transport Agency (NZTA) oversees the approval process and each distributor has statutory responsibilities to report to the NZTA against these standards. Each distributor must, prior to a vehicle being first sold, undertake a pre-delivery inspection of every vehicle to validate the vehicle complies with the Rules and standards set under Rules. As such all LDV and SsangYong vehicles comply with NZ’s standards as can be shown in the company’s statement of compliance. The above process should not be confused with ANCAP ratings. ANCAP (or other new car assessment ratings such as Euro-NCAP, JNCAP etc) are not required under NZ law (or under the laws of other countries). These are a consumer test to rate the relative performance of car in a stimulated crash test and are in effect just like consumer ratings on toasters, TVs, fridges and the like. ANCAP testing provides useful additional information as do the results of other testing regimes. But they are not key to or essential in determining a vehicles safety for use of NZ roads. These are determined by NZ legislation and the Land Transport Rules pursuant to our legislation. I trust the above is enough information to put this matter to rest? Please let me know if you require any further clarification.

RESPONSE FROM COMMERCIAL APPROVALS BUREAU ON BEHALF OF THE MEDIA We have been asked to respond to this complaint under the following codes: Code of Ethics – Basic Principle 4, Rule 2, Rule 3 Code for Advertising Vehicles – Principle 1 CAB approved this SsangYong commercial on 19/04/16 with a ‘G’ general classification. The commercial promotes the ‘Tivoli’ model. A complaint has expressed the view that ANCAP ratings are ‘the NZ safety rating’. The first ‘A’ in ANCAP stands for ‘Australia’. SsangYong vehicles are designed and manufactured in South Korea, and are advertised with a safety rating determined by KNCAP (Korean New Car Assessment Program). KNCAP sits under an umbrella organisation that includes European, Japanese, Chinese, Latin, Asian and indeed Australian NCAP amongst its partners. The proposition that Korean safety ratings are somehow ‘less legitimate’ than their Australian or European counterparts is deeply troubling for reasons that should be apparent. The commercial does not mention an ANCAP rating, therefore it cannot be said to deceive or misled. Further to this, the complainant and indeed any other New Zealander or interested consumer can freely search the ANCAP database to find the Australian safety rating for any new car.

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INFORMATION REGARDING THE COMPLAINT FROM NZTA Please find below some information about the NCAP ratings for the Ssangyong Actyon Sports Ute, and the differences between the ANCAP and KNCAP rating systems. Ssangyong Actyon Sport Ute We cannot find evidence that the Ssangyong Acton Sport Ute actually has a specific KNCAP safety rating at all. From what we can see KNCAP has only one rating for the Actyon model (http://goo.gl/0K7sx5). The date on this rating cannot be determined, but the accompanying photograph indicates that the 2005-2011 version was tested.

It should also be noted that this rating is for the 5-door SUV variant of the model, not the Utility (Ute) variant as claimed. KNCAP did not publish a separate rating for the Ute, and nor does it provide any information on the applicability of the SUV rating to the Ute. Ssangyong New Zealand have claimed that this rating is applicable to the current Actyon Sports Ute model, which has a different frontal appearance.

It is also worth noting that the rated vehicle was left-hand drive so it is not necessarily the same specification as the right-hand drive vehicle they are selling in NZ. It is common practice for manufacturers to “facelift” models midway through their product cycle. This is normally limited to cosmetic changes, with the underlying structure remaining the same. By claiming that the above 4 star KNCAP rating is applicable to this model, it appears that Ssangyong NZ is implying that the underlying vehicle is indeed identical to the earlier pre-facelift version. However, there is an unresolved question of whether the structure, mass and equipment of the Right-hand drive Sports Ute variant is equivalent to the left-hand drive 5-door SUV variant that was tested. As KNCAP provides no information on this, it appears that the Ssangyong has drawn this conclusion. Whether this inference is supported by KNCAP is not known.

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In 2008, ANCAP tested an Australian market Ssangyong Actyon Sports Ute and gave the model a 3 star rating. The vehicle tested was a pre-facelift model resembling the following:

Ssangyong NZ has claimed that one of the reasons that the ANCAP rating is not applicable is that the ANCAP test vehicle is a different generation. This is difficult to reconcile given Ssangyong NZ appears to be stating that a KNCAP test (of a pre-facelift SUV model of the same model generation tested by ANCAP, as outlined above) is applicable to the current Actyon Sports Ute variant.

The question of specification differences between Australian and New Zealand market models cannot be answered without further details to support the claim, but it should be noted that one of the primary reasons for the 3-star ANCAP rating was a relatively poor structural performance in the offset frontal impact test. In order for the New Zealand model to have a higher rating than the Australian model, there would need to be significant structural differences between the two variants. This would be highly unlikely given the production systems used by vehicle manufacturers. ANCAP’s Technical Manager, Michael Paine, has examined this and made the following comments: “For Australian regulation purposes the Actyon was first certified in 2007 and the current model has the same RVCS certification number (37191). In 2012 a "facelift" was introduced but did not appear to affect the crash test performance or ANCAP rating. Advice was sought from Ssangyong/Ateco on this but no response was received and the ANCAP 3-star safety rating has continued to apply to the current model in Australia. There do not appear to be any differences in safety specifications with the current New Zealand model and so the ANCAP is applicable to it.” KNCAP vs ANCAP With regards to the differences between the KNCAP and ANCAP rating systems, in the context of this model, there are significant differences between KNCAP testing and ANCAP testing. The 4 star KNCAP rating for this model was based on a 56km/hr full-frontal crash test. This test is effective in testing a vehicle’s restraint system (seatbelts and airbags), but is not as effective in testing the structural integrity of the vehicle. It is for this reason that all major NCAPs (including KNCAP) now include a 64km/hr offset frontal impact test. Ssangyong NZ has provided information on the current KNCAP test protocols to support their claim (“NCAP New Car Assessment Programs” brochure), but this was not in effect when the Actyon was tested by KNCAP. The 3 star ANCAP rating for this model was based on a 64km/hr offset frontal impact crash test, as outlined in the “NCAP New Car Assessment Programs” brochure. This is a more challenging test than the 56km/hr offset frontal test, especially where the structural performance is concerned.

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Aside from the differences in test protocols, there are also differences in assessment and scoring protocols between the two NCAP systems. These protocols describe how the raw data from crash tests etc are interpreted into star ratings. With respect to the Actyon ratings, the ANCAP test and assessment protocols were more challenging than those used by KNCAP. No comprehensive work has been done to compare how tough the current ANCAP protocols are in comparison with the current KNCAP protocols, but a recent result for a different model tested by both programs appears to indicate that the ANCAP assessment protocols may be more challenging [see attached email from myself to Rachel Prince explaining this]. It would not be correct for Ssangyong to make a blanket statement that KNCAP is “tested to a higher standard” than ANCAP based on the test protocols alone: these need to be examined in conjunction with the assessment and scoring protocols. Ssangyong Tivoli Given the assessment protocols are different for the KNCAP and ANCAP rating systems, without testing the Tivoli through the ANCAP system there is absolutely no guarantee that this model would receive a 5 star ANCAP rating. Global NCAP Brand Usage Guidelines I have also attached the NCAP Brand Usage Guidelines published by Global NCAP in 2014. This is a position agreed to by all nine New Car Assessment Programs at the Global NCAP Annual Meeting held in China in 2014. It outlines that logos / ratings from ‘out of market’ NCAPs are not to be used as the specification of the vehicle tested/rated may differ to the specification of the vehicle being sold in the local market. Also, the range of tests conducted and the assessment and calculation methods used by each NCAP differ. … The example referred to is the KIA Carnival. This model was tested in 2014 by KNCAP, and scored a 5 star rating under that system: http://goo.gl/A8ecK8 The same model was tested by ANCAP in 2015, and received a 4 star rating: http://www.ancap.com.au/safety-ratings/kia/carnival/4d16fb This test revealed deficiencies in the Carnival’s structure (mainly with footwell deformation and pedal movement), which is why it did not receive a 5 star ANCAP rating. The ANCAP protocol includes a post-crash assessment of structural deficiencies and points are deducted where injury hazards are present. It doesn’t look like KNCAP does this. KIA subsequently reengineered the vehicle to address this, and the model was retested. The reengineered version received a 5 star rating: http://www.ancap.com.au/safety-ratings/kia/carnival/f19b4b

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FURTHER RESPONSE FROM THE ADVERTISER IN RELATION TO NZTA INFORMATION I am awaiting some further information from KNCAP and SsangYong Korea in relation to some of the comments made by NZTA I’ll clarify some of the points directly with them in due course, however it may take some time for these overseas organisations to come back to me. In the meantime the complaints are essentially about the use of KNCAP in general, which we are entitled use just like other car companies in NZ who use the EuroNCAP, JNCAP ratings etc. We await the ASA boards feedback based on the information we have currently supplied.

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