1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites

German carmakers play down collusion claims

July 25, 2017

Hoping to avoid fines, Daimler was the first firm among the suspected cartel group to report the collaboration to antitrust authorities, while Volkswagen has called a special supervisory board meeting.

Deutschland Deutsche Autobauer unter Kartellverdach
Image: picture alliance/dpa

On Saturday, the European Commission said antitrust regulators were investigating a possible German auto industry cartel involving VW, Audi, Porsche, Mercedes and BMW.

As markets took in the news on Monday, auto stocks fell sharply, due to uncertainty over possible antitrust fines, since the European Union's executive arm has the power to impose heavy penalties on firms found to be infringing cartel rules.

Read more: Cartel of cheats

In theory, the maximum fine from the European Commission or Germany's federal competition authority could reach 10 percent of a firm's revenue - or close to 50 billion euros ($58.3 billion) across all five car companies, based on their 2016 sales.

First in, first out

Daimler, the maker of Mercedes, was the first firm among the suspected cartel to break ranks and report the collaboration to authorities, potentially sparing it billions in fines, German media reported Tuesday.

Citing "matching information" from several anonymous sources, daily Süddeutsche Zeitung and several broadcasters reported that Daimler took the case to the authorities "significantly sooner" than Volkswagen, which reportedly turned to them in July 2016.

Under European rules, the first firm to reveal evidence of a cartel can escape a fine. Both the European Commission and Germany's competition authority say they have received information relating to the alleged cartel, which is now "undergoing examination" in Brussels.

Read more: Massive collusion amongst German automakers

Daimler has already been in the Commission's sights over one cartel case, paying 1.1 billion euros last year for price-fixing between its truck division and three other European manufacturers.

A spokesman for Daimler declined to comment on the most recent report.

Out of the blue

The story originally broke on Friday when German magazine Der Spiegel reported that VW, its Audi and Porsche brands, Daimler and BMW may have colluded to fix prices on components, and agreed on suppliers and technologies, including diesel emissions treatment systems, using industry committees.

Spiegel said the talks had led to the use of smaller tanks containing AdBlue, a urea-based liquid needed to help filter nitrogen oxides (NOx) from diesel emissions. Larger tanks would have been more expensive and taken up too much room, the magazine said.

Read more: Diesel emissions kill. What is the industry going to do about it?

BMW said on Sunday that emissions filtering systems in its cars were "adequate" and that discussions with other manufacturers about AdBlue had been held with a view toward building a pan-European network of AdBlue refilling stations, therefore denying any wrongdoing.

Daimler said on Monday it had a substantial compliance program, which was "constantly improved and adapted." Daimler's works council chief Michael Brecht demanded an immediate investigation into the allegations.

Are we there yet?

The car industry has been hit with big fines both in Europe and the US in recent years for cartels related to various parts such as lighting systems, engine coolers and bearings.

For the world's largest carmaker, Volkswagen, the diesel emissions scandal alone has already cost tens of billions of euros since it admitted to cheating on regulatory tests in 2015.

"More ugly details could yet emerge, leaving German manufacturers - and the EU auto sector - still firmly in the sin bin for now," Exane BNP Paribas automotive analyst Stuart Pearson, told German news agency DPA.

The car industry is one of the heavyweights of the German manufacturing sector, directly employing more than 800,000 people.

tr/jbh (Reuters, dpa, AFP)