BMW, Daimler and VW charged with Emissions Collusion by EU Regulators

After the mbad diesel scandal of the VW Group a few years ago, it seems as if a door had been opened that it seems can not be closed. Since then, there have been countless investigations by German and European regulatory bodies on all German brands, not just the VW Group brands. While some research found that both BMW and Mercedes-Benz are innocent of any kind of manipulation of diesel emissions, now things do not look good for them. The three brands have recently been accused by European regulators of collusion on emissions.

According to this research, BMW, Mercedes-Benz and several German brands in the VW Group worked together to block the deployment of clean emissions technology.

"Daimler, VW and BMW may have violated EU competition rules, as a result, European consumers may have been denied the opportunity to buy cars with the best available technology," said European Competition Commissioner Margrethe Vestager. , in a recent statement.

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BMW will not comment publicly at this time, but said it will respond to the investigators. "BMW Group will examine the objections and information provided by the European Commission and send a response to the authority. Since this matter refers to the ongoing procedures of the European Commission, the company will not comment on the content of the objections at this time. The BMW Group's review of the statement of objections and the resulting possible financial impact is ongoing, "the Bavarian brand recently declared.

The Bavarians also stated that their emission technology differs from other German brands, saying that "the exhaust gas treatment technologies used by the BMW Group are significantly different from other solutions on the market. The BMW Group has set its own course from the start, using a combination of several emission control systems in its diesel vehicles. In vehicles where emission control is carried out by SCR systems, a NOx storage catalyst is also installed. This translates into excellent emissions performance under real driving conditions, also compared to competitors. The combination of these two systems together with the recirculation of exhaust gases in the engine also means that AdBlue consumption of BMW vehicles is very low compared to competitors. "

BMW admitted that there was a meeting between the automakers about how to solve certain emission restrictions, specifically the PPF (Gasoline particulate filter.) However, the meeting was more about determining the limits and restrictions of this new PPF with legislators and lawyers.

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"The objective of the manufacturers and their badociations was to participate in the discussion about the definition of future limits, technically achievable. This is a common practice in all industries with respect to upcoming regulatory proposals. To reach an industry position on the proposed legislation, the manufacturers first reached an agreement between them and then through the VDA and ACEA automobile badociations. The results of the discussions were incorporated into the consultations held by the Commission, "BMW said in its recent statement.

This does not look very good for the main German brands, but we will have to see how everything works to make a final judgment.

UPDATE: Here is a new statement issued by BMW AG

In connection with the ongoing antitrust process, the European Commission today informed the BMW Group about a "Statement of Objections". The EU Commission is investigating whether German automakers cooperated in technical working groups to restrict competition in the development and deployment of emission reduction technologies.

The BMW Group will challenge the claims of the EU Commission with all legal means, if necessary.

The statement of objections leads the BMW Group to believe that it is likely ("more likely than not") that the EU Commission will issue a significant fine. According to the International Financial Reporting Standards, this entails the obligation to recognize a provision.

Therefore, after its revision of the statement of objections, the BMW Group will recognize a provision, which is likely to exceed 1,000 million euros. This effect will have a negative impact on financial results in the first quarter of 2019. The review of the objection state company and the inspection of the files will take some time. As a result, a final evaluation of the financial impact is currently not possible.

As a result, the EBIT margin in the automotive segment for the current fiscal year is expected to be 1-1.5 percentage points below the previous target range of 6-8%.

The orientation of the Group's profit before taxes for the current fiscal year remains unchanged (significant decrease compared to the previous year).

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