The Volkswagen emissions scandal (also called "dieselgate") began in September 2015, when the United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to German automaker Volkswagen Group. The agency had found that Volkswagen had intentionally programmed turbocharged direct injection (TDI) diesel engines to activate their emissions controls only during laboratory emissions testing which caused the vehicles' NOx output to meet US standards during regulatory testing, but emit up to 40 times more NOx in real-world driving.Volkswagen deployed this programming software in about eleven million cars worldwide, and 500,000 in the United States, in model years 2009 through 2015.
A documentary on Netflix about Volkswagen Dieselgate reports all german car companies (Daimler, BMW, Audi, Porsche and Volkswagen) not just Volkswagen manipulated Nitrogen Oxide (NOx) test results to meet emission standards:
https://www.netflix.com/title/80118100
http://www.imdb.com/title/tt7909168/?ref_=ttep_ep1
Furthermore the cartel of german car makers colluded according to reports:
http://www.spiegel.de/international/germany/the-cartel-collusion-between-germany-s-biggest-carmakers-a-1159471.html
https://www.forbes.com/sites/bertelschmitt/2017/07/22/dieselgate-product-of-vast-vw-bmw-daimler-car-cartel-conspiracy-fresh-report-says/#7818941b7ce8
For two decades, more than 200 managers and engineers of five large German automakers met in 60 different task forces to coordinate “the development of cars, costs, suppliers, and markets,” wrote der Spiegel. “They cooperated in secrecy, as closely as one would expect it from the divisions of one company, of a German Auto Inc – or a cartel.”
During these meetings, Daimler, Audi, VW and BMW agreed, in September 2008, to an 8-liter AdBlue tank for all vehicles that they knew was insufficient to meet the emission standards which turned into Dieselgate.
The agreements among the German automakers likely constitute one of the biggest cartel cases in German industrial history. They began in the 1990s and were expanded to include more and more issues, probably in part because industry executives long viewed violations of competition law as harmless rule violations, on a par with parking tickets.
The cartel of German automakers could also face fines in the billions. And the industry's image, which has already suffered considerably from the diesel scandal, will be damaged even further.
https://www.forbes.com/sites/bertelschmitt/2017/07/22/dieselgate-product-of-vast-vw-bmw-daimler-car-cartel-conspiracy-fresh-report-says/#7818941b7ce8
For two decades, more than 200 managers and engineers of five large German automakers met in 60 different task forces to coordinate “the development of cars, costs, suppliers, and markets,” wrote der Spiegel. “They cooperated in secrecy, as closely as one would expect it from the divisions of one company, of a German Auto Inc – or a cartel.”
During these meetings, Daimler, Audi, VW and BMW agreed, in September 2008, to an 8-liter AdBlue tank for all vehicles that they knew was insufficient to meet the emission standards which turned into Dieselgate.
The agreements among the German automakers likely constitute one of the biggest cartel cases in German industrial history. They began in the 1990s and were expanded to include more and more issues, probably in part because industry executives long viewed violations of competition law as harmless rule violations, on a par with parking tickets.
The cartel of German automakers could also face fines in the billions. And the industry's image, which has already suffered considerably from the diesel scandal, will be damaged even further.
The exposure of the club of five strikes the companies at a time when they need all of their strength and financial assets for other things: the transition to electric cars and their transformation into mobility service providers. It is also a time when they are being challenged by new competitors from Silicon Valley and China.
But now VW, Audi, Porsche, Daimler and BMW must first address a problem in their most recent past. It is a painstaking process, because the agreements extend across such a long time period and so many managers were involved.
But now VW, Audi, Porsche, Daimler and BMW must first address a problem in their most recent past. It is a painstaking process, because the agreements extend across such a long time period and so many managers were involved.
EU anitrust rules prohibit cartels and restrictive business practices. EU has commenced investigations alleging a cartel among a group of German carmakers:
German automaker Daimler AG confirmed it has applied for the status of principal witness in the European Union's (EU) probe of allegations that German carmakers formed an illegal cartel. Daimler would be immune from any fines arising from the cartel scandal if it succeeded with its application to officially cooperate with EU competition authorities.
Within weeks the antitrust officials carried out a raid this week at the offices of BMW . The EU, in its statement, said that the inspection related to the Commission concerns that several German car manufacturers may have violated EU antitrust rules that prohibit cartels and restrictive business practices.
The automotive industry is undergoing a massive transformation. The entire automotive industry is in the midst of this radical transformation to electric and autonomous driving. Having the EU antitrust investigation and potential of multi billion dollar fines whilst making this very expensive transformation will be a significant challenge:
Most everyone knows that the next big thing in the automobile world will be self-driving cars and trucks and vehicles that operate on battery power rather than gasoline or diesel. What’s now becoming clear is that this shift from traditional cars to tomorrow’s vehicles is going to be hugely expensive to design and build, especially for luxury carmakers.
Just how expensive emerged Thursday when Daimler, the maker of Mercedes-Benz vehicles, tempered its best sales figures ever with a forecast of flat earnings this year because of the heavy outlays needed for investments in research and development. The company earned €10.9 billion ($13.6 billion) net profit in 2017.
The warning of flat earnings sent Daimler’s share price lower by 3 percent. In addition to the profit warning, Daimler’s share price has been affected by a sheaf of industry scandals, ranging from software that helped cheat emissions tests for diesel vehicles, to accusations of cartel law violations and hugely embarrassing news reports about tests conducted on monkeys using diesel fumes.
Just how expensive emerged Thursday when Daimler, the maker of Mercedes-Benz vehicles, tempered its best sales figures ever with a forecast of flat earnings this year because of the heavy outlays needed for investments in research and development. The company earned €10.9 billion ($13.6 billion) net profit in 2017.
The warning of flat earnings sent Daimler’s share price lower by 3 percent. In addition to the profit warning, Daimler’s share price has been affected by a sheaf of industry scandals, ranging from software that helped cheat emissions tests for diesel vehicles, to accusations of cartel law violations and hugely embarrassing news reports about tests conducted on monkeys using diesel fumes.
Daimler, which has already been fined €1 billion by European Union antitrust authorities because it participated in an illegal cartel with other European truck producers over emissions, now faces similar charges in the so-called Dieselgate scandal because company officials participated in meetings with other German carmakers and discussed how much to charge for emission-control devices for diesel cars.
So far, Daimler has not been charged with installing illegal software on diesel cars to cheat on emissions tests, but prosecutors in Germany and the United States are looking at Mercedes cars as part of a broader investigation that began with cars manufactured by Volkswagen. VW has already pleaded guilty to breaking US environmental laws.
Carmakers paid to conduct tests on monkeys to prove that diesel fumes were not toxic. Reports about the testing have caused a furor in animal-loving Germany, with the carmakers, who have largely escaped being reprimanded by politicians because of the diesel scandal, now facing a chorus of political disapproval.
So far, Daimler has not been charged with installing illegal software on diesel cars to cheat on emissions tests, but prosecutors in Germany and the United States are looking at Mercedes cars as part of a broader investigation that began with cars manufactured by Volkswagen. VW has already pleaded guilty to breaking US environmental laws.
Carmakers paid to conduct tests on monkeys to prove that diesel fumes were not toxic. Reports about the testing have caused a furor in animal-loving Germany, with the carmakers, who have largely escaped being reprimanded by politicians because of the diesel scandal, now facing a chorus of political disapproval.
It seems that the EU regulator shows no sign of letting up. Yet whilst regulators are working hard to crack down on on the german car cartel, politicians and lobby groups are reluctant to heavily penalise these companies, of which a handful are partly state-owned. Manufacturing cars is its single largest industrial sector and employs 775,000 people.
It will be interesting to see whether the EU antitrust will do something about this as many have doubts the German government will do anything to diminish their mighty car industry.
It will be interesting to see whether the EU antitrust will do something about this as many have doubts the German government will do anything to diminish their mighty car industry.
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