The market regulatory authority in Xi'an, Shaanxi province, has urged a local Mercedes-Benz dealer to give a customer a refund after she claimed the new car's engine was defective on the day she bought it.

The woman, who had signed a contract with the dealer Xi'an Lizhixing Co on Feb 25 to buy an imported Mercedes-Benz CLS300 vehicle through installment payments, claimed the engine developed problems after she picked up the car on March 27, according to a statement released by the Xi'an Internet Information Office on Sunday.

The woman, who was not named, then asked the company for either a refund or exchange for another car but failed.

On April 9, she filed complaints with the Shaanxi provincial market regulatory administration and Xi'an municipal government through telephone calls, asking for a refund. The market regulatory administration in Xi'an's Gaoxin district－where the company is located－also urged the company on the same day to handle the complaint according to the law.

The market regulatory administration in Gaoxin has opened an investigation of the dealer for suspected quality problems, and has authorized a testing institute to examine the car in this case.

The administration received eight new requests from the woman on Saturday, and had arranged a face-to-face negotiation between the woman and the dealership's person in charge on the same day, during which an immediate refund was offered, and the company agreed to take legal responsibility. The woman then refused the refund and said she would wait for the results of the investigation.

The administration said it will verify the evidence provided by the customer. It will also handle the case in a fair manner to protect the interests of consumers and to maintain a favorable business climate.

The woman said she saw the engine's malfunction indicator turn red after she had driven about 10 kilometers from the dealer, the administration told local media earlier. She paid about 660,000 yuan ($98,440) for the car, including additional costs and service charges for loans.

The woman spoke with the dealer after finding the engine was leaking oil, according to previous media reports, and she demanded a refund. However, the dealer only agreed to a free replacement of the engine.

A video showing the woman sitting on top of the engine cover of a red Mercedes-Benz at the dealership and complaining went viral online in the past few days.

The woman's eight requests on Saturday included demands for an investigation into the history of the car, an independent inspection of the vehicle, a formal apology from the Mercedes-Benz company and compensation for her psychological damage, according to a report by Shaanxi Broadcasting Co.

The woman said that apart from other fees, she also paid a "financial service fee" of 15,000 yuan to an employee at the dealership when she bought the car. However, she was not sure what it was for and also demanded an investigation into the fee, according to a voice recording of the negotiation between her and the dealership representative.

On Saturday, the Beijing Mercedes-Benz Sales Service Co issued a statement saying it was deeply sorry for the customer's experience. It said it had launched an investigation and dispatched a special team to Xi'an to negotiate with the woman. In another statement on Sunday, the Mercedes-Benz Financial Services said that Mercedes-Benz charges no such financial service fee to dealers or customers, and have repeatedly required its dealers to abide by the law and guarantee customers' rights.