In what seems to be a never-ending slaughter of German car manufacturers, they don’t seem to be helping themselves. A new in-depth investigation by the European Commission is intending to discover whether VW (Volkswagen, Audi and Porsche), BMW and Daimler, so-called the ‘Circle of Five’, colluded on a project to restrict the competition on development and roll-out on technology designed to help clean out emissions of both petrol and diesel cars.
How did this all come about?
In October of 2017, the European Commission entered into Anti-Trust investigations at the ‘Circle of Five’ headquarters to understand if any EU anti-trust laws had been broken. Now, nearly a year later, a formal investigation has been opened to properly investigate the matter.
The EU received information that cartel-like behaviour could potentially be happening through a report by the German magazine, Der Spiegel in a report they published last year. The report exposed the cartel and revealed documents that show potential collusion since the 1990’s. It states that VW initially self-incriminated themselves by voluntarily admitting to cartel-like behaviour in more recent years, but since that reveal, Der Spiegel researched heavily into the potential issue.
The EU frowns upon cartel behaviour, and this, if proven to be true, is a very prevalent example of cartel behaviour that limits the competition in the market, and potentially harms civilians by stopping them from buying lower emissions cars.
What is the investigation focusing on?
The core focus of the investigation is certain emissions control systems, two devices that are selective catalytic reduction (‘SCR’) systems to reduce harmful nitrogen oxides emissions from passenger cars with diesel engines; and ‘Otto’ particulate filters (‘OPF’) to reduce harmful particulate matter emissions from passenger cars with petrol engines.
Commissioner Margrethe Vestager, in charge of competition policy at the Europen Commision, said: “The Commission is investigating whether BMW, Daimler and VW agreed not to compete against each other on the development and roll-out of important systems to reduce harmful emissions from petrol and diesel passenger cars. These technologies aim at making passenger cars less damaging to the environment. If proven, this collusion may have denied consumers the opportunity to buy less polluting cars, despite the technology being available to the manufacturers.”
It is believed that the companies discussed numerous other technical issues as well, including at what speed a convertible roof could safely open and close, cruise control, common quality requirements for car parts, common quality testing procedures and crash testing.
While the EU anti-trust laws leave room for technical cooperation, it seems that this has gone a bit too far for the commission this time, hence the opening of a formal inquiry.
At the current stage in the investigation, the commision has no reason to believe the companies colluded on the defeat devices of the Dieselgate scandal.
Why is this important?
Something that is heavily frowned upon by the European Commission is cartel behaviour and anti-competitive behaviour. Since the 2015 dieselgate scandal, automotive groups, especially those based in Germany, have had to tread carefully, but this doesn’t help the already tarnished image that they, especially VW, already have. By potentially demonstrating this kind of behaviour, more shame will rest on the shoulders of the groups.
As this involves emissions, something that is currently at the forefront of the automotive industry’s issues, this propels the investigations to new heights. If the inquiry finds anything that shows that by engaging in anti-competitive behaviour the groups allowed higher emissions then it becomes a whole different ball game. It links it straight back to the dieselgate scandal and shows that despite everything there has been no change in the mindset of the companies. If the inquiry shows that they did engage in anti-competitive behaviour and from that emissions contributed to premature deaths and other pollution-related illnesses, then the fines could reach into the billions of Euros.
Next steps for the groups
All of the companies and brands involved, BMW, Daimler, VW (encompassing Audi, VW and Porsche,) are fully cooperating with the inquiry.
BMW said it was “wholeheartedly committed to the principles of market economics and fair competition,” and added “From the start of the investigation, the BMW Group has supported the commission in its work and will continue to do so. Due to the ongoing investigation, the BMW Group will not comment on the case.”
Daimler confirmed partaking in the investigation and filed a leniency application but wouldn’t comment any further on the matter.
All of the companies are focusing on electric cars now in order to show they are changing, indeed the BMW i8 and i3 are some of the most distinguishable electric cars on the roads. VW is aiming to release their first pure EV next year, called the iD, which will be a hatchback.
After this, the companies will have to do a lot of work to not only improve their image but to prove that they are contributing positively to society and actively helping to reduce emissions.
Do you think that this inquiry will show anything? What do you think about what has come to light? Let us know below
As usual the eu commission takes a year to decide to investigate, giving the alleged companies enough time to hide their failings, again the manufacturers benefit not the people who buy the cars believing they are doing their bit for limiting emissions, now we the motorists are facing extra taxes and restrictions imposed by our government for something that is not our fault, when will our elected leaders open their eyes and deal with the source of the problem.
No one in the EU is an “elected” leader they get “given” cushy positions and need to drag out these investigations to justify their existence and continue to line their pockets with taxpayers cash. We don’t “vote” for them and we can’t sack them. I am so glad we are leaving this beurocratic behemoth so it can cave in in on itself…
A very relevant comment
There is something wrong with the vote up or thumbs up part of this programme/website. I clicked on the thumbs up symbol and it changed to Zero I clicked again and got a message that I had already voted the article by Pete up. I have now logged in to my account to see if that makes any difference. The thumbs up symbol has a -1 by it! U have entered my name so this comment can be posted and I have to type in my email address surely as I am now logged in your programme should know my email address and name. I was going to chat online with you guys but that option isn’t available on this page but I did see it earlier. Please get your programme updated! Now I have got two flashing blue lines to the right of this message box what are they for? Now I am typing again they have disappeared.
Paul Burton….There’s nothing wrong with the website. You aren’t the only person voting, and the voting system gives a real-time score based on the summation of positive and negative votes. When it shows -1, that means more people have voted the comment down than have voted it up.
Thanks for that. I was expecting the thumbs down to have another number by it! here is the answer I had from the chat line. Hi Paul, most of this functionality is impossible for us to change. I just checked and there is no thumbs up or thumbs down on the comments at all. Pressing the enter button sends a message but that is a helpdesk default that we cannot change. Once you post a comment it doesn't automatically log you in, although that can be done separately. As for the chat disappearing, we only have the chat on the contact page to keep it tidy, as otherwise members got annoyed – Kitty
If when you clicked thumbs up there was already one thumb down, then it would indeed go to 0. i.e. if there were already 5 thumbs up, then 6 people come along and give it a thumbs down, with no further ups, it would end up at -1. It’s a bit of an odd way they have of doing it, instead of just recording the number of thumbs up & down as Youtube does.
Not sure about that as
Andrew Bignell above has now got 32 thumbs up. Thanks though as I probably didn’t notice the -1.
“…the source of the problem” …being the EU itself and their regulatory overreach (as the US EPA did)?
Also, is there any way to link emissions with specific deaths? AFAIK, there isn’t, so the EU will have a very hard, if not impossible job of proving it legally.
Good Question.
When they stop receiving benefits and having their egos stroked !
Probably because politicians are directors/shareholders of these companies. They stand to gain massively by not enforcing the law!
Just like they did when they got Beeching to shut down the railways!
I think this is another ploy to get everyone on to electric vehicles. Just like they told everyone diesel was the way to go. The only problem is when all cars are electric everyone who uses electricity will have to pay higher prices including the house hold. As the tax reaped from fossil fuels will have gone. Surely the boffins can come up with ways to remove the poisons from the fuels before they sell it on.
Also why don’t ships, trains and planes have to be fitted with catalytic devices?
Hi Dave – good analysis but the only real way forward for EV is to use onboard fuel cells to produce the electrical power and not batteries which have so many inherent disadvantages.
With Fuel cells you just fill up the tank of your vehicle with compressed hydrogen at filling stations just like now, and drive off. The only emissions you get are pure water vapour! This technology has bee around for years. I had an interview with BP (New Malden) about 50 years ago and they were working on the development of fuel cells. I didn’t take the job, but I guess the cheap fossil fuel won out at board room level.
It’s a great idea, all we need is to find the huge amount of clean energy needed to get the hydrogen in the first place!
The only thing with compressed hydrogen it is not a clean fuel. It is when you us in the car but to make the hydrogen is very dirty process by stripping down methane
Ships are having to fit exhaust gas scrubber systems or switch to low sulphur diesel fuel.
Think; why would they do this?
If we accept that certain emission controls make cars unreliable (think 1.6 TDI EGR valves or TFSI oil consumption and unburnt petrol which dilutes the low SAPS and hence low HTHS rated engine oil which in turn causes major engine damage when diluted with petrol) it becomes obvious this is done because they cannot make engines reliable.
Why would they do this?
There is simply not the available semi precious metals and minerals available, or indeed the technology or infrastructure at present to make electric power practical. That in turn means that cheap transport which is considered clean simply cannot continue. The ramifications for that are massive and can only spell one thing.
I find it entirely reasonable that no one wants themselves or their offspring to live through these effects. The obvious thing is to try to maintain the status quo as long as possible and if that means lying or acting effectively fraudulently, the attitude is ‘so be it’. More and more people who realise the situation are prepared to take risks.
This goes far deeper than simply trying to sell cars or make money which 99% of people think is the issue. A brief look at other comments will show that most people are concerned simply with the superficial matter and not how or why the situation has come about. That is more concerning than this emissions issue itself.
The EU have had a long record of acting on myths and not reality. The sooner the EU crumbles, the better. I’m glad the UK is leaving, just not quite convinced though that many of our own politicians are any better. It’s political posturing and fairy-dust wishful thinking to gain votes, not dealing with the real world and the many limitations and practicalities that entails.
As I see it, most politicians are not business minded or think like business people looking for solutions and prosperity. Of course they line their pocket through various side activities and I envy the USA for having a business minded president (morals aside) who is proving through unorthodox decisions that decades of stagnation can be overturned quite quickly. If only Maggie Thatcher was the current leader…
Surely this could work in reverse? Instead of colluding to suppress these developments, they could equally well share them. Costs might rise, but they have a superior product that they can sell at a premium. Other manufacturers would have to forego the advantage or develop something themselves.
I don’t believe that ultimately the EU will ever punish German car companies. Lets face it the EU is run by the Germans for the Germans and French. Punishing VW won’t happen. It’s just Realpolitik. Look how the US punished BP under Obama. You honestly see that happening to VW?
You forgot Seat and Skoda who are also in the group?
“Something that is heavily frowned upon by the European Commission is cartel behaviour and anti-competitive behaviour.”
The sheer hypocrisy of the EU is breathtaking. They put aside this principle in attempting to limit the UK economy to the point of serious damage in their stance in the Brexit negotiations! The whole agenda by the EU is to operate a cartel and abuse trade practices in order to punish the UK for daring to leave a corrupt conglomerate of nation states.
Erm…. No….it was the Brexiteers who voted to leave and now they’re getting exactly what they voted for!
Erm … , No ….the “Brexiteers” voted to leave the EU. Forget the nonsense trotted out by bitter Remainers …that “people didn’t vote for ……….. ” (replace the dots with anything you wish ). They voted to LEAVE THE EU. Period. And they are NOT currently being given that. Deceitful, anti-democratic politicians on both sides are determined to keep us in. Control and subjugation is what the EU is about.
David, I agree entirely with your comments. I would add blackmail to their handling of a miserable situation. The ship is sinking and they are in denial…
Nope! You could have had access to the single market and you chose to walk away from it. Now you’re crying because you fell for the lies told by the Leave campaign and believed it would be the (what was it Liam Fox said?) “easiest thing in the world” to get a deal! I’d have thought you’d be chuffed – “out means out” & all that! Congratulations, it’s starting to look like you’ll get what you wanted!
You suggest Max that the EU is a cartel, but in principle the European Free Trade Zone was set up to avoid restrictions on developments or sales; any law-abiding country within the area can join the EU and sell goods to each other without restrictions. There is a lot of hypocrisy within the EU, but this stems not from the EU itself, but from individual countries that don’t subscribe to, veto, or just ignore certain EU Laws, this is one of many reasons why Brexit was so poorly misunderstood. It’s true that Brexit will eventually allow the UK to make their own trade deals and possibly, one day negotiate better ones, but what I do know for a fact is that there are a small number of people that drove Brexit that now have a once in a lifetime opportunity to make a huge amount of money at the expense of the general economy and the working classes.
Rather like Heselltine, the Remainer, who stands to lose a considerable sum of money each year from loss of EU Farming subsidies. Yes, there are people on both sides who are motivated by enormous financial gain, including many politicians who were hoping that the EU will continue paying their lucrative pensions etc., etc.
What’s all this rubbish got to do with corrupt German Car Manufacturers with British Shareholders?
I bet a lot of you drive these German Cars!
German car makers have for decades flourished on the lie of clean emissions when they have been among the most polluting.
Yet still there are many thousands in the UK queing up to buy them.It must be for feelings of prestige and power rather than having any coscience on how we poison our country.
I understand your emotion but would be more persuaded if you could produce some positive evidence that UK customers go into car showrooms armed with their first and most important question, “What’s it like for pollutants?” and walk out the door if they aren’t rock-bottom.
If, indeed, that factor of purchase was anything like a priority the streets wouldn’t be choked with petrol and diesel engine emissions, as we are advised that they are, but with electric only vehicles and which would be eminently more affordable than they are now.
Undoubtedly your slightly xenophobic and evidence bereft comments would not have been necessary if we had UK motor manufacturers, We don’t – we just assemble for overseas based car makers simply because our products didn’t have …”thousands in the UK queuing up to buy them” in the past.
in fairness, the reason most British car manufacturers died a death possibly WAS because they didn’t have ‘thousands queuing up in the UK to buy them’, although i doubt it. Rovers were, even towards the end, a popular enough choice for many drivers, to the point where the top 10 sellers every month were filled by Ford, Vauxhall (technically a UK ‘brand’) Rover and possibly an odd VW or Fiat rounding out the top 10. BUT during the 70s and 80s build quality was terrible and by the 90s/2000s it had ONLY improved thanks to their partnership with Honda for many of the mechanicals. the bodywork still rusted away, they still had a rather offset driving position (compared to market leaders such as Ford, Vauxhall etc) they still had ‘old fashioned’ (for the era) interiors with fake wood (which LOOKED fake) etc. as a result they were bought predominantly by old people who believed that british was still best. Jaguar build quality was improved VASTLY when they were bought by FORD! and THAT is why they failed and there are no more actual ‘british’ car companies (major ones at least) they were simply terrible. i had ONE and swore then id never own another, and i HAVENT.
As other’s have said a cartel complaining about another cartel is a joke! Any way in a short while these car’s will be to expensive to buy and we will be buying car’s made here or countries that want to trade with us rather than punish us
Deplorable, clearly anti trust legislation is inadequate. I have purchased 4 VW cars in the last 6 years, all clearly misold, with fradulent claims. Claims made with the intention of gaining conumer, Government and EU support.
Criticism of cartel and anti-competitive behaviour coming from the European Commission is a bit rich! Ask the Africans!.
Can the European Commission also look in to the fact that with the new technology, the BMW Diesel vehicles which have been exported to other countries with less stringent regulations, are not working properly – BMW was made aware of the situation but continued to sell their vehicles, fully aware that the vehicles stop functioning after a few months – and then BMW state that there is no problem with the vehicle. I can provide further details upon request.
This is old news recycled Daimler aka MERCEDES , and BMW have all been acquitted as there was no proof they actually really did cheat the emissions laws but VW group did
Time then for the public to understand what crock bunch: VAG (VW Audi Group including Porsche, Skoda and SEAT plus specialists like Bentley and Bugatti), Daimler (means Mercedes Benz) plus Bavarische Motoren Werke – really are. What a relief that the world’s most popular all-electric manufacturer is UK located. With Leaf v.2.1 out Spring 2019 we are in Pole position to lead European and wider world sales through the 2020s and beyond. Crack on then.
Stand by for the predictable lick spittle admiration of VW and co. This behaviour arises from their dominance of world markets – it is hubris just like the Kaiser when kicking off WW1
Only “since the 1990’s”? That’s clearly not true. They’ve been doing it for decades, as have all companies that prioritise profits over principles.
For example, when Rover developed its ultra-lean-burn petrol engine in the 1980’s, it could have been a market breakthrough for the company and the motor industry, especially in California and the USA in general. It was a unique development that could and should have resuscitated the company. However, the German manufacturers identified a threat to their prized export market share in the USA so they colluded with each other and indigenous American manufacturers (including Japanese companies that had assembly plants in America) to lobby the US Government to prohibit the import of Rover vehicles fitted with those engines. The technical and financial arguments used by the lobbyists were specious and the probable value of Rover’s imports would have been a minimal proportion of the overall market (because of Rover’s limited production capacity) but they succeeded and, ultimately, put Rover out of business. BMW bought the company and its technology. No doubt, after a few years, they plan to launch a new range of ultra-lean-burn petrol cars to fill a market gap below the expensive electric products and will claim that the engines are “all their own work”.
As usual, everything is being attached (rather boringly now) to Brexit. Brexit, Brexit, Brexit…to all those “remainers” out there, this is just the type of behaviour we elected overwhelmingly, (and still would!!!!!) to get rid of. Hypocrisy, overbearing pointless regulations and “favourites”. Another few million quid wasted on a pointless investigation we all know will lead to pretty much nothing.
Everyone knows German cars are utter rubbish anyway. Anyone who buys one is just a sheep, open to over-enthusiastic marketing and cuckoo-land claims. They should be used to unreliable claims (and cars) by now…
Quote from the CEOs of each company: “Oooops!!!”.
I think one word covers it all: “Ooops!!!”.
Cheating to enhance profits is one thing but the crime & punishment mentioned in the last sentence in the sub-heading “Why is it important” should give the bosses a few sleepless nights. I assume the EU have the same Health & Safety laws & consequences as us (they wrote most of them didn’t they?). If so, the billions of euros will be the least of there worries. Should they have affected human life, or curtailed it, the buck stops at the highest position involved where liability can be proved, taking all other guilty parties along with it on the way up. I’ve said it before & I’ll say it again, “Ooops!!”.
We joined a common market NOT the EU
Does this mean that BMW will be doing yet another recall???
Does this mean that BMW will be carrying out yet recall ???
I spotted a write but can’t remember where there is an established firm of solicitors who are acting upon those mass VW owners to sue them for there misrepresention of emmisions? Any idea who this firm is?
Sorry meant to say a write up