German carmakers Volkswagen, Audi, BMW ‘colluded’ on diesel emissions: Report

Volkswagen admitted to cheating on diesel emissions in 2015.
This file photo taken on September 29, 2015 shows the logo of German car maker Volkswagen at a dealership in Woodbridge, Virginia.(AFP)
This file photo taken on September 29, 2015 shows the logo of German car maker Volkswagen at a dealership in Woodbridge, Virginia.(AFP)
Published on Jul 22, 2017 12:02 AM IST
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Agence France-Presse, Frankfurt am Main | By Agence France-Presse

German carmakers Volkswagen, Audi, Porsche, BMW and Daimler secretly worked together from the 1990s onwards on issues including polluting emissions from diesel vehicles, news magazine Der Spiegel reported Friday.

Volkswagen, facing tens of billions of dollars in compensation and fines after admitting to cheating on diesel emissions in 2015, had reported the cartel to German competition authorities in a letter seen by the weekly, as did Mercedes-Benz maker Daimler.

“The German car industry agreed in secret working groups about technology in their vehicles, costs, suppliers, markets, strategies and even about the emissions treatment of their diesel vehicles,” the magazine reported.

Such cooperation between all of the country’s large car manufacturers could have included “behaviour infringing antitrust law,” according to the Volkswagen letter.

A spokesman for Volkswagen -- which owns Audi and Porsche -- told AFP Friday that the group would not comment on “speculation and conjecture.”

BMW and Daimler similarly declined to comment.

A spokesman for Germany’s federal competition authority said he could not comment on the Spiegel report.

But he recalled that the authority raided six companies in June 2016 on suspicion of infringing competition law in steel purchases by car manufacturers and suppliers.

BMW, Volkswagen and Daimler all acknowledged being raided at the time when contacted by AFP.

However, “presumption of innocence applies until the investigation is over,” the spokesman said.

The cartel depicted in the Spiegel article extends far beyond possible secret agreements on steel prices.

More than 200 employees of the carmakers had formed 60 working groups covering “all areas of car development, petrol and diesel engines, brakes, transmissions and gearboxes... as well as choice of suppliers and prices for parts,” an excerpt of the report read.

Diesel cooperation

According to the magazine, carmakers also held “innumerable meetings” from 2006 onwards about diesel exhaust processing designed to reduce emissions of harmful nitrogen oxides (NOx).

Carmakers agreed to install only small tanks of a treatment solution, AdBlue, used to convert the gases into harmless water and nitrogen, as larger tanks would have been more expensive.

The size of the AdBlue tanks agreed on was too small to clean exhaust gases by the necessary amount -- “laying the foundations for the diesel scandal,” Spiegel reported.

Volkswagen admitted in September 2015 to installing software in 11 million cars worldwide that reduced NOx emissions when it detected cars were undergoing regulatory tests.

In real on-road driving, levels of the harmful gases could be many times higher.

More recently, authorities’ suspicion fell on Mercedes-Benz and Smart maker Daimler, with investigators raiding sites belonging to the group in late May.

The Stuttgart-based firm recalled some three million cars earlier this week for a software update designed to reduce emissions.

Meanwhile, VW subsidiary Audi on Friday recalled up to 850,000 Volkswagen, Audi and Porsche cars fitted with its diesel engines for a similar software update.

Shares in Germany’s top carmakers and suppliers, including BMW, Continental, Daimler and Volkswagen, were among the worst performers on the blue-chip DAX index in Frankfurt Friday.

Volkswagen was close to the bottom of the table, with its shares losing more than four percent to trade at 137.15 euros by 1415 GMT, while the overall market was down 1.7%.

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