Germany's emissions-cheating saga

A growing number of German policymakers and representatives of business organizations fear the country's ongoing Dieselgate scandal will have a lasting negative impact on Germany as a business location.

"The emissions-cheating scandal and the ensuing or looming bans of diesel cars in some cities are creating a lot of uncertainty among German businesses," the president of the Association of German Chambers of Industry and Commerce (DIHK), Eric Schweitzer, told the Rheinische Post newspaper on Tuesday.

Schweitzer said it would be wrong to believe that the scandal had only hit carmakers. "The drop in the value of diesels has also affected many small and medium-sized companies across the nation," he pointed out, with many firms not being able to use their fleets during recalls and necessary software updates.

Growing collateral damage

DIHK officials estimated that SMEs had already incurred losses of over half a million euros ($590,000) as a result of Dieselgate.

In addition, many suppliers see their revenues going down further as the number of new diesel car registrations drops rapidly.

Schweitzer warned the nationwide impact of the emissions-cheating scam had to be taken more seriously. "The whole scope of the scandal needs to be cleared up, just as much as citizens' right to cleaner air in cities needs to be respected," he said.

The DIHK president's comments came a day after German premium carmaker Daimler was ordered by Transport Minister Andreas Scheuer to recall 238,000 vehicles over suspected emissions manipulation via special switch-off devices.

Almost 800,000 Daimler cars are affected across Europe.  Germany's mass-circulation tabloid Bild reported that the KBA road vehicle authority was currently probing a total of 3 million cars from the Stuttgart-based manufacturer for illegal devices, including G-Class and S-Class vehicles.

Positive image going down the drain

Thomas Dörflinger from Chancellor Angela Merkel's Christian Democrats (CDU) said the latest revelations about Daimler were "a slap in the face" of Baden-Württemberg [the southern German state where Daimler is headquartered], all the more so since "Daimler had always insisted it was not implicated in the cheating scandal."

But now, Daimler has added another layer to an already thick scandal. Remember that it all started with Volkswagen being forced to admit back in 2015 that it had installed so-called defeat devices in about 11 million vehicles worldwide to manipulate emissions data and fool consumers and regulators alike.

For VW, Dieselgate is anything from over judicially. Prosecutors in Braunschweig keep investigating some 50 suspects. Former CEO Martin Winterkorn, but also the carmaker's current chief executive, Herbert Diess, are suspected of market manipulation by not having told investors about the scandal early enough.

Hunted down abroad

In the US, Volkswagen has already paid over €25 billion in fines and litigation costs, with auto parts supplier Bosch as well as German automakers Daimler and BMW also in the crosshairs of prosecutors there. For the record: Also in the firing line in the US over suspected manipulation are General Motors, Ford and Fiat Chrysler.

But back to Germany where Volkswagen and Daimler are not the only two brands facing accusations over emissions cheating.

Earlier this week, prosecutors in Munich initiated legal proceedings against Audi CEO Rupert Stadler and searched his home, accusing him of fraudulent behavior, involving the use of emissions-cheating devices in Audi cars. At least 20 people form Audi are suspected of having played a part in the scam.

KBA officials made Audi recall 216,000 diesels, among them 60,000 A6 and A7 vehicles.

Recalls over illegal software have also hit sports carmaker Porsche. In 2017, Porsche had to recall 21,500 3-liter-engine Cayenne cars, but 3-liter-engine Macans were also affected later on.

BMW was suspected of installing illegal devices in at least 11,000 vehicles, with CEO Harald Krüger insisting the company had used the wrong software "by mistake," adding there could be no talk of intended manipulation.

The good guys?

It would probably be easier to name the German carmakers NOT associated with Dieselgate. Opel for instance, now part of French carmaker PSA. The former German manufacturer had indeed not seen any raids by law enforcement officers or any ordered recalls as initial investigations were dropped for lack of hard evidence.

Nonetheless, Opel "voluntarily" updated its software in 90,000 of its diesel cars, including Insignia, Cascada and Zafira vehicles.

hg/sri (Reuters, AFP, dpa)