After investigating recent car sales disputes, market regulators in Xi'an, Shaanxi province, have fined a Mercedes-Benz dealer 1 million yuan ($145,000) for selling unqualified products and misleading consumers.

The market supervision bureau of Xi'an's high-tech zone, where the dealer, Lizhixing Co, is located, said on Monday that the company had been selling products that do not meet the standards of personal and property safety, as well as exaggerating and concealing information related to the protection of customers' interests.

The investigation came after a woman claimed the engine of her newly purchased Mercedes-Benz CLS300 was leaking oil. The dealer initially refused to give her a refund but later agreed to pay compensation.

An inspection by mechanics found that the engine's right side was damaged and leaking oil, though there was no history of replacement or maintenance.

"The engine defects came during assembly," the regulator said, adding that the problems infringed the woman's rights of personal and property safety.

Investigators said Lizhixing Co also improperly induced customers to sign an agreement with another company, Shaanxi Yuansheng Auto Trading Co as part of the sales transaction, and charged a service fee from which it profited. This violated fair trade and the consumers' right to know, because the purpose of the fee was not clear.

"The company was fined 1 million yuan for the two illegal acts, and the money will be submitted to the State treasury," it said.

Law enforcement authorities are investigating the trading company, which is suspected of infringing consumer rights. Other cases of suspected consumer abuse by the parent company in China, Mercedes-Benz Automobile Sales Co, have been transferred to other authorities.