GERMANY’S auto industry is confronting a staggering emergency as affirmations of intrigue and the continuous aftermath from the discharges embarrassment keep on threatening trust in the nation’s prized carmakers.
Auto giants Daimler, Volkswagen and BMW were all hit with lawsuits accusing the companies of colluding illegally to drive up the prices of their cars in the US and Canada – but this is just the latest in a series of failures that could spell the end of the dominance of German firms.
Attorney David Wingfield said in a statement: “If the allegations in the claim prove to be true, then Canadian consumers have been harmed by a long-standing cartel of German car manufacturers to provide inferior components in their vehicles while charging premium prices for these vehicles.”
While in Brussels EU officials are set to look into claims Audi, BMW, Mercedes-Benz, Porsche and Volkswagen have been colluding on technology for years after allegations emerged in German magazine der Spiegel claiming manufacturers worked together to disguise the true polluting levels of their vehicles.
Acting on evidence provided by a former Volkswagen employee, the EU has opened the cartel investigation following claims that up to 200 employees at the car giants were involved in secret closed-door meetings.
Those involved in the alleged meetings are said to have swapped vital information on methods to avoid certain test procedures for CO2 and emissions.
The European Commission confirmed it was assessing information on the alleged collusion, but added it was “premature at this stage to speculate further”.
In response, German economics minister Brigette Zypries said the allegations and the resulting EU investigation could seriously threaten the country’s car industry.
She said: “What’s at stake here is nothing less than the credibility … of the whole German car industry. Without comprehensive clarification, confidence cannot be restored.”
She added she was taking the der Spiegel accusations “very seriously” and said all carmakers implicated would be “well advised to fully co-operate with the authorities and ensure transparency”.
Shares in Germany’s biggest car manufacturers plunged in light of the allegations and with some facing fines that experts have suggested could reach billions of dollars, it reduces the ability their ability to invest in future developments – another area where Germany’s car giants could suffer.
While international rivals have invested in hybrid technology, German carmakers have continued to develop their diesel engines and ignored alternatives.
Last week France and Britain announced plans to halt the sale of petrol and diesel cars by 2040, and countries across Europe have begun to crackdown on emissions in a bid to reduce pollution.
On Friday, a court ruling in Stuttgart paved the way for a local ban on older diesel cars that do not meet the latest emissions norms and German carmakers, including Stuttgart-born Mercedes and Porsche, may soon find themselves playing catch-up in a bid to develop hybrid technology for their vehicles.
The ongoing series of scandals facing Germany’s car industry has done nothing to improve consumer confidence, with many customers duped by false emissions claims.
The latest controversy brings renewed negative scrutiny to Volkswagen, which has struggled since 2015 to put its global emissions cheating scandal behind it.
The company so far has set aside more than £18billion ($24billion) to cover related fines and compensation and a former executive charged with covering up the scandal agreed on Tuesday to plead guilty to fraud and conspiracy charges.
Volkswagen’s German rivals are being forced to recall millions of cars after it was found their engines had software fitted to cheat emissions tests.
On Thursday, the German transport minister ordered the recall of 22,000 Porsche Cayenne diesel cars, while Daimler and Audi voluntarily recalled three million and 850,000 cars respectively.
Fritz Esser, a leading columnist, compared the crisis facing the industry to the collapse of coal mining in Germany, which saw the number of miners drop from 350,000 in 1980 to just 28,000 today.
He wrote: “It is possible the car industry could go the same way. That one day we will look back to 2017 and say, that was the year it changed.”