German magazine alleges decades of improper practice to fix costs and discuss diesel emissions.
Dieselgate has taken an unexpected turn, with German magazine Der Spiegel reporting that Mercedes, BMW, Audi and Porsche have been using secret working groups since the 1990s to fix the prices of diesel emissions treatment systems.
"These allegations look very serious and would mean more than 20 years of potential collusion," Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler told Bloomberg. "There seems to be a never ending story of bad news about the industry’s bad behavior."
Der Spiegel quotes a letter sent by Volkswagen to German competition authorities, which have now opened an investigation into whether any illegal practices have taken place. In the letter, the company has admitted that over 200 employees from BMW, Audi and Porsche have been involved in more than 60 meetings discussing vehicle development, brakes, gasoline and diesel engines, clutches and transmissions as well as exhaust treatment systems.
Volkswagen sent the letter to cartel authorities on July 4 admitting to possible anti-competitive behavior. It's not known whether or which of the activities outlined in the report could be found to be illegal. The letter was sent in response to an investigation by German competition authorities into a possible steel cartel.
It's now understood that among other things, the carmakers discussed choice of suppliers and component costs, particularly the cost of AdBlue, an exhaust emissions treatment system for diesel engines. The manufacturers also talked between them about details such as the sizing of AdBlue tanks and agreed to use smaller rather than larger ones to cut costs, Der Spiegel said.
The size of the tanks meant they weren’t fit for purpose, ultimately leading to the Dieselgate scandal, in which Volkswagen was found to have manipulated emissions using hidden software.
Mercedes issued a voluntary recall this week for over three million diesel-engined cars, and Audi has similarly announced diesel engine changes for 850,000 cars that will be applied on a voluntary basis. Both manufacturers are keen to emphasise that the moves are proactive attempts to avoid any future problems with their diesel engines.
Share prices at Mercedes parent company Daimler, Volkswagen and BMW have all dropped following the news. The manufacturers have declined to comment on media speculation so far.