Refuting cartel tag, VW says automaker exchanges ‘common’

According to reports, shares of Germany's biggest car makers have dropped in trade on 24 July 2017, as a consequence of allegations that Volkswagen, BMW, Daimler, Audi and Porsche were colluding in the 1990s and formed a cartel which possibly laid the basis to the so-called 'dieselgate' emission scandal. [Julian Stratenschulte/EPA]

German car giant Volkswagen, facing allegations that it colluded with fellow automakers on diesel emissions and other issues, insisted on Wednesday (27 July) that technical exchanges between manufacturers were “quite common”.

VW, already facing tens of billions of dollars in compensation and fines after admitting to cheating on diesel emissions, reported the industrial cooperation to German competition authorities in a letter seen by the Der Spiegel weekly, as did Mercedes-Benz maker Daimler.

In a statement on Wednesday the Volkswagen Group said it had “no comment to make at the present time on details of these issues or on speculation.”

It added however that discussing the feasibility of new technologies and safety standards “is in many instances necessary and valid”.

Cartel probe looms over German car industry

German carmakers faced a brewing scandal Monday (24 July) as suspicions grew they colluded illegally for decades, further damaging the industry’s image and exposing it to massive financial risks.

“It is quite common for car manufacturers all over the world to engage in an exchange on technical issues in order to accelerate the pace and quality of innovations,” the group added.

Such cooperation “brings benefits in many respects, not least for customers, because innovative solutions become available more quickly and at a lower price than costlier individual solutions”.

“Secret working groups”

Last week Der Spiegel reported that “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”.

Automakers Audi, Porsche, BMW and Daimler, as well as Volkswagen, secretly worked together from the 1990s onwards on issues including polluting emissions from diesel vehicles, the news magazine reported.

Dieselgate scandal still fuming in Europe, more action needed

Europe has not yet reached the bottom of the Dieselgate scandal as “many other brands” besides Volkswagen show too high emissions in real driving conditions, the EU’s Internal Market Commissioner Elżbieta Bieńkowska warned in a letter to the 28 member states’ transport ministers.

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 Germany’s federal competition authority at the time would 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.

The European Commission has indicated that it will look into the matter.

A Volkswagen executive charged with fraud and conspiracy for his part in covering up the “dieselgate” emissions-cheating scandal has agreed to plead guilty, US officials said on Tuesday.

EU drafts tougher 'Dieselgate' rules to stop cheating

National ministers moved today (29 May) to crack down on emissions cheating after the Volkswagen “Dieselgate” scandal by giving the European Commission more powers to monitor testing and fine automakers.

Volkswagen admitted in September 2015 to installing software in 11 million cars worldwide that reduced 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.

Stuttgart-based Daimler recalled some three million cars last week for a software update designed to reduce emissions.

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

If the latest cartel allegations are confirmed it could cost the German automakers involved billions of euros, and the first company that discloses the existence of an illegal cartel to the European authorities will be exempt from any fines.