Germany’s beleaguered car industry faces another regulatory tangle, as the European Union opened a probe into Volkswagen, Daimler and BMW over suspected collusion that could have delayed clean-emissions technology for cars.
The investigation, which could lead to heavy fines, focuses on technical talks to develop selective catalytic reduction systems to reduce nitrogen-oxides emissions from diesel cars and “Otto” particulate filters for gasoline engines.
“These technologies aim at making passenger cars less damaging to the environment,” EU Competition Commissioner Margrethe Vestager said in an emailed statement. “If proven, this collusion may have denied consumers the opportunity to buy less polluting cars, despite the technology being available to the manufacturers.”
Still, the EU said it had no indications the carmakers coordinated on illegal defeat devices to cheat regulatory testing — a wider scandal that has tarnished the reputation of VW globally. The EU also said Tuesday it didn’t have “sufficient indications” that talks on developing other technology — crash tests, car roof opening and cruise control speed — were anti-competitive.
The probe represents another challenge for the German auto industry, which is grappling with the fallout from revelations in 2015 of VW’s diesel-cheating and the disruptive shift to self-driving, electric cars. Allegations on a cartel emerged last year in Germany’s Spiegel magazine, which reported that VW, Daimler and BMW met starting in the 1990s to coordinate activities related to vehicle technology, costs, suppliers and strategy as well as diesel emissions controls.
Volkswagen has been cooperating with the European Commission and will continue to do so, the company, whose namesake VW as well as Audi and Porsche brands have been implicated in the cartel probe, said in an emailed statement.
“This initiation of proceedings is a normal, process-driven step that Volkswagen has been expecting,” the carmaker said.
Daimler also said it’s cooperating with authorities. The Mercedes-Benz maker has filed a leniency application, it said, meaning it’ll act as a key witness in the probe in exchange for a reduction in potential fines. The carmaker noted the EU investigation didn’t involve allegations on price fixing.
The start of the EU probe adds to ongoing challenges to VW. In the coming months, VW will have to deal with at least a half-dozen court actions stemming from its use of software to cheat on diesel emission tests. After putting aside some $32 billion to settle lawsuits and pay damages, VW faces more than $10 billion in further claims from disgruntled investors and customers — as well as untold damage to its reputation as top executives risk being hauled before the court.
At the same time, Daimler has agreed to recall some 774,000 vehicles in Europe to improve emissions performance.
The newly announced EU investigation is a “new thing” because it focuses on suspicions that the companies “agreed not to use the best technology” instead of looking at shady deals to fix prices, Vestager told a conference at the European Parliament in Brussels.
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