The automaker is escaping massive fines of about $4.4 billion.
After meeting Daimler’s CEO, Dieter Zetsche, Germany’s Transport Minister Andreas Scheuer has ordered the automaker to recall 774,000 diesel vehicles in Europe. “An immediate formal recall because of prohibited shutoff devices” is required for the Mercedes-Benz GLC and C-Class models, which join the already recalled Vito van.
The manufacturer will upgrade the engine and exhaust system control software of those vehicles, but no hardware fixes are planned. While the recall is definitely not good news for Daimler, it basically means it has escaped way more costly measures from the government such as financial fines, after “constructive” talks with Minister Andreas Scheuer.
Mercedes’ recall comes after Germany’s Federal Motor Transport Authority (KBA) discovered five unapproved manipulating software devices in some of the company’s latest Euro 6 diesel engines. According to Bild am Sonntag newspaper, as much as one million vehicles are equipped with those so-called cheating devices.
However, Daimler is still denying that it has used “illegal switch-off devices” and has announced it would go to court if necessary to prove it’s not doing anything illegal. The affected compression ignition engine-powered vehicles are sold only in Europe.
With the new recall, Daimler is escaping massive fines of approximately $4.4 billion (estimated). According to specialist Arndt Ellinghorst, an analyst with Evercore ISI in London, the recall will cost the automaker less than $120 million.
“We don’t see any evidence that Daimler was designing software to deliberately cheat on emission testing,” Ellinghorst commented to Automotive News. “With this recall, fines are off the table.”
This new recall follows a similar action by the manufacturer last year, when some three million vehicles were recalled for software updates. Similar campaigns were also organized by Volkswagen and BMW.
On a final note, Mercedes is currently inspecting and updating the software of 4,923 diesel-powered Vito vans sold worldwide.
Source: Automotive News