By on October 20, 2017

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Back in July, German authorities became concerned that the country’s manufacturers had been operating one of the largest automotive cartels in history. With many auto executives still under the microscope for diesel emission manipulation, combined with inter-familial strife between the Piech and Porsche clans, Germany’s auto industry was starting to resemble a PG version of the film Goodfellas — with a dash of Dallas, for flavor.

Despite some rather serious accusations, nothing really came of the cartel investigation. We were beginning to wonder if it was much ado about nothing. But Germany’s antitrust officials hadn’t forgotten — they were simply biding their time during preliminary investigations into corporate collusion and price-fixing. Earlier this week, they made their big move and raided BMW’s headquarters. 

In addition to BMW, both Daimler and Volkswagen Group have been implicated in the cartel accusations after Der Spiegel magazine claimed all three conspired to fix prices on various automotive components for decades. Shortly afterward, the European Commission assembled a team to begin its investigation.

According to Reuters, the commission has yet to initiate any formal antitrust proceedings against the manufacturers. But EU staff announced the first raid had only taken place on Monday, October 16th.

BMW, however, did not frame it quite the same way. Instead, it called the event an inspection and specified that it was cooperating with officials by assisting the European Commission with its work. It also wanted to absolve itself from being conflated with the emissions blowback relating to the size of AdBlue tanks.

“The BMW Group wishes to make clear the distinction between potential violations of antitrust law on the one hand and illegal manipulation of exhaust gas treatment on the other,” the company said. “The BMW Group has not been accused of the latter.”

Meanwhile, Daimler announced Friday that it has “filed an application for immunity from fines with the European Commission some time ago.” Despite being still being in the middle of this new scandal, the manufacturer has positioned itself as the one having informed officials in the first place. By doing so, it may be able to take advantage of the European Union’s leniency program — which allows the first company to come forward with illicit activity to be absolved of financial penalties.

Chief Financial Officer Bodo Uebber said he was so confident in Daimler’s action that he saw no reason to set aside any funds for possible antitrust fines from the government.

Volkswagen may also receive leniency if the matter goes to court. While it wasn’t the first to “blow the whistle,” simply being cooperative and coming forward with additional information could alleviate possible fines by up to 50 percent. VW’s current course of action is unknown but it is believed to be more willing to cooperate with regulatory investigations than BMW. As things stand now, VW has stated it hasn’t been raided but declined to comment further.

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9 Comments on “BMW Raided in German Cartel Investigation, Daimler Seeks Immunity...”

  • avatar

    Scandal here, scandal there, everywhere a scandal.

    So, Diamler and VAG are trying to throw BMW under the bus. Gotta love the Germans, when sh¡t hits the fan, its everyone for themselves.

    • 0 avatar

      Nothing really new here. My old employer (another of dem Deutschen volk) got caught fixing prices for several types of vitamins in a cartel arrangement back in 2001. BMW will probably plead down any fine just as the old employer did by “being helpful to the investigation”. My old company’s fine was dropped from 296M euros down to 235M euros or so and they were allowed to raise prices on their products to offset the costs incurred by the penalties.

    • 0 avatar

      It is a fact of nature that whatever hits the fan will not be evenly distributed.

  • avatar
    SCE to AUX

    BMW: “I shot the sheriff, but I did not kill the deputy.”

  • avatar

    I’m pretty sure that the whole industry is this way.

    Car makers will support the artificial tiers by putting cash on the hood, never mind that mid range car X with a $1000 added to the interior will make it a class leader and probably nicer than the luxury rides two tiers up. They won’t do that, so if it won’t sell, then incentives….the product isn’t made better or more competitive, they just jigger the pricing.

    We might not ever see it, but I’m sure each car maker has an exact idea what it costs to make a car by the competition. No one is going to upset what is a very profitable system…and no one will undercut the existing price and tier structure, not even the Chinese, until their homegrown cars can take on Honda, GM, MB, etc…then, it will get ugly, but we’ll probably all be in electric appliances by that point.

  • avatar

    If I had a source, I’d link…but

    Car makers all do a competitive analysis for other cars, part by part. This is well known.

    A car, past engineering, marketing and paying the talent in the C Suite, is commodity.

    X metal (frame/chassis/sheetmetal)
    An engine

    Compare motorcycles….a Honda 125 is $4000, say. The worldwide Chinese knockoff of that bike $2300. A Harley is $15k. There isn’t nearly $11k in materials between the two, and the basic assembly line is going to be the same.

    Compare my CTS to a Camaro. Same engine, trans, probably same Differential. Brakes are the same. In car electrics slightly different, but not much. All the stuff behind the dash HVAC, probably same. Better interior and more foam soundproofing ? Not $30k worth…….

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