Amid suspicions that it used 'defeat devices' like VW's

By Fortune Editors and Reuters
July 13, 2017

The committee of German lawmakers investigating the Volkswagen emissions scandal has summoned German carmaker Daimler for an extraordinary meeting to address allegations it sold cars with excessive emissions.

Germany’s Sueddeutsche Zeitung, citing a search warrant issued by a Stuttgart court, had reported Wednesday that prosecutors were examining the possible use of illegal software to manipulate emissions tests in Mercedes-Benz vehicles between 2008 and 2016. It said Daimler had sold over a million such cars in Europe and the U.S..

In May, Stuttgart prosecutors, who are working with authorities in the U.S,, conducted raids of 11 sites in Germany as part of a probe into Daimler and excessive diesel emissions. The searches were initiated in the course of investigations “against known and unknown employees at Daimler, who are suspected of fraud and misleading advertising connected to manipulated emissions treatment of diesel passenger cars,” the prosecutor’s office said at the time.

Read: Hoaxwagen – Inside VW’s Diesel Fraud

Analysts said the latest report would spook investors, but stopped short of saying this emissions probe could take on Volkswagen-scale dimensions with millions of vehicles needing to be recalled.

“We take comfort from the fact that this is a European issue, not a U.S. investigation. We also do not believe these Merc cars will lose their certification. Our judgment is that Merc will be asked to recall these cars for a ‘software fix’,” Bernstein Research analysts said in a note on Thursday.

Read: The DOJ Wants to Know if Daimler Faked Emissions Data in the U.S.

Daimler had warned in its last quarterly report that it could face penalties in the U.S. from an investigation into emissions management software by the Justice Department, the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB).

If Daimler did face VW-style fines of about $7,000 per vehicle in the U.S., the penalty for Mercedes-Benz would be around $200 million to $300 million, Bernstein estimated.

Daimler said it was fully cooperating with the authorities, adding it does not believe cars will lose their road worthiness certification. The Stuttgart prosecutor’s office declined to comment.

 

 

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