BMW and VW to fight emissions challenges

BMW and VW to fight emissions challenges

30 September 2019

BMW is unlikely to succumb to pressure and give in over its defence against its part in a European emissions cartel, according to reports.

In April, the European Union charged Daimler, BMW and VW with colluding to block the introduction of emissions-reducing technology. While Daimler acted as a whistleblower and VW Group has been assisting with investigations – both measures likely to dramatically reduce potential fines – BMW has consistently denied being involved in any collusion.

The company has no interest in settling the investigation, according to German publication WirtschaftsWoche, citing BMW sources.

The EU wants BMW to accept its involvement to avoid a court case and to allow it to impose fines sooner. Such an admittance of guilt could also benefit BMW, as it would likely lead to a lower fine, along the same lines as VW.

BMW previously said it expects a fine of €1 billion and set aside this amount in its Q1 results.

In added pressure for Germany's automotive industry, the Volkswagen Group (VW) is preparing to fight the largest legal claim of its type in history, with 400,000 car owners signed up to a collective lawsuit over the Dieselgate scandal.

Staying clean

The Commission’s preliminary view is that BMW, Daimler and VW participated in a collusive scheme, in breach of EU competition rules, to limit the development and rollout of emission-cleaning technology for new diesel and petrol passenger cars sold in the European Economic Area (EEA). This collusion occurred in the framework of the car manufacturers’ so-called ″circle of five″ technical meetings.

BMW has not commented on its position. The carmaker is possibly aware of the damage that accepting wrongdoing could cause, especially as it is the only one of Germany's big three not to have been found fitting ′defeat devices' to its vehicles – the situation that led to the Dieselgate scandal.

Open case

Meanwhile, VW is expecting to hear the first oral hearing of the class-action lawsuit over the Dieselgate scandal this week. The move comes after the carmaker has refused to offer compensation to drivers whose cars were fitted with emissions-altering software, despite having done so in the US.

The Financial Times reports that by the end of 2018, private insurance companies had paid out some €380m to support 144,000 individual claims against VW, according to figures from the German Insurance Association (GDV); roughly 60,000 such cases remain outstanding.

Lawyers for VW are confident the case, which they say could last for four years and end up in front of the country's Supreme Court, will eventually be dismissed.

Bad times

Germany's automotive industry is undergoing a tough period, with all three of its leading carmakers embroiled in emissions-related activities. Earlier this month, German prosecutors fined Daimler €870 million following a probe into selling rigged diesel cars.

Meantime, VW had to convene an emergency board meeting following the  regional public prosecutor's office of Brunswick bringing charges of alleged market manipulation against three senior executives.