German car makers – shares crash on allegations of collusion
German car makers’ shares crash on allegations of collusion
S hares in Germany’s thickest car manufacturers plunged in early trading as investors digested allegations about decades of collusion inbetween Volkswagen, BMW and Daimler.
Investors dumped the shares after reports, which very first appeared in the German press late on Friday afternoon, claiming the companies may have secretly worked together on technology, forming a cartel that could have led to the “dieselgate” emission scandal.
The allegations come just days after Daimler recalled more than 3m of its Mercedes Benz cars for work to lower their emissions. The week before, Audi – which is wielded by Volkswagen – recalled 850,000 vehicles.
O ver the weekend the European Commission said it was looking into the claims. If it does investigate and finds evidence of a cartel, the car makers could face multi-billion euro penalties.
German authorities are already investigating, with Spiegel magazine, which very first reported the claims, telling that evidence of collusion was uncovered by chance when prosecutors raided VW offices looking into suspicions of a separate cartel involving steel.
The allegations have stirred up angry responses among the car makers’ employees, with VW calling an extreme meeting for Wednesday where the claims are expected to top the agenda. Daimler staff are “are rightly horrified and angry” by the claims, according to a spokesman for the works council, adding that if they turn out to be true “there must obviously be consequences”.
B etween them the three car giants have had about €10bn wiped off their value since the news very first broke. The companies shares have all fallen by more than Five.5pc since the claims very first emerged.
A ccording Spiegel, the car makers began working together in the 1990s in an attempt to stay ahead of foreign rivals, with engineers meeting “regularly several times a year” to discuss technology.
BMW and Daimler have been dragged into the scandal that engulfed VW after it was discovered 11m of its cars worldwide were fitted with “defeat devices”.
T he systems can tell when a car is being tested and turns on its utter pollution control systems. This are not active during everyday driving. The result is that cars can pump out up to forty times the permitted amount of pollution in real world conditions compared to in tests.
O n Sunday BMW categorically denied collusion. In a statement it said: “We rival to provide the best harass treatment systems. Unlike other manufacturers, BMW Group diesel vehicles employ a combination of various components to treat harass emissions and thereby fulfill all legal emissions requirements and also achieve a very good real-life emissions spectacle.”
VW and Daimler have previously said they do not comment on “speculations and allegations”.
