Cartel probe looms over German vehicle industry

The Stuttgart, Germany-based manufacturer is counting on diesel while it invests in lowering the price and increasing the range of battery-powered cars to meet increasingly tough environmental regulations.

The group based in Wolfsburg, northern Germany reported net profits attributable to shareholders of 3.1 billion euros ($3.63 billion) between April and June, up from 1.15 billion in the same period past year.

Additional claims that the manufacturer worked together with Volkswagen AG and its subsidiaries to fix both the design and pricing of diesel emission treatment systems brought in European Union antitrust regulators to investigate the claims. BMW is offering software updates on 350,000 of its older diesels.

Daimler last Tuesday announced a voluntary recall of more than 3 million Mercedes vehicles in Europe amid mounting questions over its diesel engines. Audi says that this service will be free of charge to their customers, as well as to Porsche and Volkswagen customers.

German automakers plan to meet with Chancellor Angela Merkel’s government on August 2 for a so-called Diesel Summit to discuss the future of the technology, which employs tens of thousands of people in Germany. A committee to further reduce emissions will also be established as part of the rescue plan. But diesels emit less carbon dioxide than do gasoline motors. “Without comprehensive clarification, confidence can not be restored”, said Zypries said.

So far, Volkswagen has refused to comment on this information, which the European Commission is now examining. An antitrust ruling that the companies illegally restrained competition could lead to heavy fines.

In September that year, Volkswagen admitted to manipulating 11 million diesel cars worldwide to minimise harmful nitrogen oxides (NOx) emissions under regulatory test conditions – while producing far more in real on-road driving.

German prosecutors have searched Daimler offices as part of a probe into possible emissions manipulation, and US authorities have asked Daimler to conduct an internal investigation into its emissions certification procedures.

Daimler has said that it’s cooperating with that investigation.

Volkswagen has reported higher profits for the first half of the year as the company benefited from increased sales in the growing European economy and moved past one-time costs for its diesel emissions scandal in the U.S.