An investigation by German authorities into whether Volkswagen Group, Daimler and BMW have colluded illegally since the 1990s risks sundering ties forged by the three automakers to stave off threats from Silicon Valley.
Should evidence emerge that the three colluded to the detriment of car buyers, billions of euros in fines could result. The investigation was first reported by the German weekly Der Spiegel, which cited internal VW memos turned over to authorities in an attempt to gain leniency.
The German cartel office has confirmed it had information suggesting collusion.
"If the EU does uncover decades-long issues," wrote Exane BNP Paribas in a research note, "then the maximum [fine] of 10 percent of global revenues quickly becomes relevant."
According to documents submitted by Volkswagen and cited by Der Spiegel, some 60 working groups at the three companies have been meeting since the 1990s — more than 1,000 times in the past five years alone — to jointly make decisions and even sometimes call a competitive truce, often against the advice of their own legal departments.
One accusation raised by the magazine is that the three colluded to ensure tanks containing the urea solution AdBlue remained a predetermined small size even as the necessary amount of urea needed to clean diesel emissions would grow substantially as legal oxides of nitrogen limits sank. Without citing a document this time, Spiegel suggested that had one of the three used a larger tank, it would have tipped off authorities that a larger amount was needed.
According to the magazine, the secret working groups also discussed other product development matters, including braking control systems, seating systems, air suspensions and clutches.
Efforts by VW, Daimler and BMW to band together against the likes of Tesla, Uber and Google could unravel in the face of the allegations. The three German automakers jointly acquired Nokia's digital mapping unit, Here, in a landmark deal directed against the tech industry, and in November they teamed with Ford to start building a network of superfast charging stations for electric vehicles.
With so much at stake, the automakers appear to be on the verge of turning against each other.
While Volkswagen's board of directors held an emergency meeting last week, the newspaper Sueddeutsche Zeitung reported that BMW has suspended talks with Daimler on future cooperation projects — because its rival allegedly was the first to disclose possible collusion to cartel authorities.
Daimler CEO Dieter Zetsche refused to comment, saying he hadn't spoken to his counterparts since the Spiegel story broke. But he criticized the industry's chief weapon in the fight against regulation, German Automobile Industry Association President Matthias Wissmann, after Wissmann quickly distanced himself from the affair.
None of the three has addressed the allegations. BMW took issue with a few details, stating that diesel emission aftertreatment discussions were held to coordinate "the installation of the required tanking infrastructure in Europe" for AdBlue urea systems.
After its board meeting, Volkswagen also declined to address specifics, saying that in general it was "quite common" for carmakers to discuss technical issues to accelerate the pace of innovations. "This brings benefits in many respects, not least for customers."
The news exerts unwanted pressure in the days before the crucial "diesel summit" in Berlin on Wednesday, Aug. 2. Carmakers hope to hash out a solution with key policymakers that would prevent a ban on most diesel owners from entering cities such as Stuttgart or Munich next year.