Stocks in German carmakers tumbled on Friday amid reports they colluded to fix prices of diesel-emissions systems and other production elements as far back as the 1990s.
Der Spiegel magazine reports in its Saturday edition that Volkswagen admitted to cartel-like behaviour in admissions as part of investigations into its own cars' manipulated diesel engines and software.
According to the reports, secret meetings were held between managers of VW and its competitors BMW and Daimler. These talks included representatives of VW's luxury brand Audi as well as Porsche, once a luxury competitor and now part of the VW group.
With VW shares down 4.9 per cent at one point on Friday, the Lower Saxony car maker declined to comment on the reports as did Germany’s cartel authority.
It reportedly received a letter by VW dated July 4th, 2016, conceding that about 200 employees from the various car makers held meetings dating back to the 1990s to discuss vehicle development, brakes and engines.
The VW letter reportedly concedes anti-competitive behaviour, including technical solutions to treat diesel emissions for nitrogen dioxide (NO2) – the issue at the heart of the widening emissions fraud scandal.
The self-termed “5er Kreis” or “Circle of 5” group reportedly agreed the size of tanks containing urea fluid used to neutralise NO2 which, to save space, was too small to meet diesel emission environmental requirements.
VW and Daimler
Since the first revelations about Volkswagen’s core brand in 2015, the scandal has broadened to include other VW group vehicles and, most recently, millions of cars from the Daimler group.
Reports of widespread anti-competitive practices in the German car industry would, if confirmed, lift the ongoing diesel scandal to a new, existential, level for Germany’s most influential industry, one that generates a fifth of Germany’s total economic revenue.
Ongoing uncertainty about the scale of the diesel scandal – and the efficacy of promised software fixes – have seen cities in Germany and around Europe announce plans for diesel vehicle bans. Amid massive recall-and-fix campaigns launched by Audi and Daimler, presented by the companies as a goodwill gesture, the European Commission has raised the possibility of ordering all non-fixed VW vehicles off European roads.
"I expect a recall rate of 100 per cent from Volkswagen," wrote EU industry commissioner Elzbieta Bienkowska to transport ministers in all member states. Failing to do so, she wrote in the leaked letter, would see cars "required to be taken of the road in 2018".
The commissioner said she had written to VW group chief executive Matthias Müller on June 19th requesting information about progress on the recall campaign but had yet to receive a response.
VW has vowed to perform a software fix on millions of core brand cars across the EU, while its subsidiary Audi this week announced a recall of 850,000 vehicles.
While the named companies declined to comment on allegations, German analysts said that, if true, it would indicate a long-term pattern of collusion over diesel emissions fraud dating back two decades.
“It’s unlikely there is this much smoke without fire,” said Christian Ludwig, an analyst at Bankhaus Lampe.
