Germany's auto industry fears its image will suffer another severe blow after EU antitrust authorities said they would investigate claims that BMW, Daimler and Volkswagen Group operated a cartel for parts such as emissions treatment systems and convertible roofs.
The industry already is suffering damage to its reputation because of VW Group's emissions-cheating scandal. News of the cartel prompted the automakers' lobbying group, the VDA, to distance itself from its three key members.
VDA President Matthias Wissmann said he was dismayed to hear the claims and he also made an appeal. This time it wasn’t the usual demand that the media stop sensationalizing. Instead, he is encouraging "objective discussion."
Wissmann appeal was directed at the automakers at the center of the collusion claims, reminding them of their place in society. "The automobile industry with its technical innovations and financial success is an important part of Germany's image throughout the entire globe. It's our duty and responsibility to protect this reputation," he said.
Wissmann said the German industry should now be asking itself critical questions more openly and also practicing "self-reflection," a significant change from an industry that until now has seemed to want to avoid tough questions.
German magazine Der Spiegel first reported the cartel allegations. It claimed that 60 working groups from the three automakers, covering five brands, discussed pricing of components and technologies since the 1990s if not earlier, and more than 1,000 times in the past five years alone.
As part of the discussions the automakers agreed to limit the size of tanks that contain AdBlue, a solution to reduce harmful NOx emissions from diesel engines, to 8 liters in size to save as much as 80 euros per vehicle, Spiegel said.
Besides saving money, this also meant the automakers could more easily deceive regulators by claiming collectively that the tanks contained sufficient urea to clean up NOx emissions. Decisions by Audi, BMW and Mercedes over the past week to install new NOx-reducing software for older Euro 5 diesels suddenly could be seen in a different light.
The collusion allegations also undermine a core argument of VW Group during its diesel scandal. Since the emissions crisis erupted in September 2015, VW maintained the implausible defense that executives did not know that 11 million diesel engines were rigged to cheat official emissions tests because examining millions of lines of software code in the engine was too banal a task for upper management.
Industry watchers are debating whether the alleged collusion to be investigated by the EU is simply standardization, which is normal to develop common practices and components or a cartel to fix prices and cheat suppliers and consumers. BMW denied collusion and said talks with Daimler and VW over AdBlue tanks were about building a infrastructure of filling stations for the urea solution.
Whichever it is, the VDA said "surfing in the legal gray areas" is just as unacceptable to its over 600 members as illegal collusion.
The VDA is normally the biggest apologist for companies such as VW, Daimler and BMW. When the lobbying group automakers pay to defend them feels compelled to take the moral high ground, then the industry needs to take a close look at its practices.