Daim­ler probes cheat­ing claims

The Star Early Edition - - INTERNATIONAL - Elis­a­beth Behrmann

DAIM­LER is con­duct­ing a thor­ough in­ves­ti­ga­tion into al­le­ga­tions of diesel cheat­ing as the Ger­man car­maker seeks to bur­nish the tech­nol­ogy’s bat­tered rep­u­ta­tion amid an on­slaught of neg­a­tive news for an in­dus­try reel­ing from scan­dals.

The maker of Mercedes-Benz cars is keen to shore up diesel, which pow­ers many of its lu­cra­tive sport util­ity ve­hi­cles and big sedans as well as its trucks, vans and buses.

The Stuttgart, Ger­many-based man­u­fac­turer is count­ing on diesel while it in­vests in low­er­ing the price and in­creas­ing the range of bat­tery-pow­ered cars to meet in­creas­ingly tough en­vi­ron­men­tal reg­u­la­tions.

“Diesel is worth fighting for,” chief ex­ec­u­tive Di­eter Zetsche said yes­ter­day. Still, in his first pub­lic com­ments since al­le­ga­tions of decades-long col­lu­sion with other Ger­man car­mak­ers sur­faced last week, he largely steered clear of the topic be­yond be­moan­ing the string of bad news hit­ting the in­dus­try.

“The car in­dus­try is cur­rently caus­ing head­lines, and they’re not good ones,” said Zetsche on a con­fer­ence call with re­porters. “I know a lot of peo­ple want more clar­ity now, but we can’t com­ment on spec­u­la­tion.”

Vi­o­la­tions

The pos­si­ble an­titrust vi­o­la­tions, which emerged from a re­port in Der Spiegel on Fri­day, opened an­other set of chal­lenges, which also in­clude the threat of diesel driv­ing bans, in­dus­try wide re­calls rooted in Volk­swa­gen’s emis­sions-cheat­ing scan­dal and heavy in­vest­ment bur­dens to de­velop self-driv­ing elec­tric ve­hi­cles.

The UK is ad­ding to the ur­gency by mov­ing to ban sales of diesel and petrol cars by 2040 to com­bat air pol­lu­tion, join­ing a sim­i­lar plan in France.

Car­mak­ers’ fight for diesel goes be­yond hold­ing on to a tried-and-tested tech­nol­ogy. Un­til con­sumers fi­nally buy elec­tric ve­hi­cles, man­u­fac­tur­ers need diesel as it gen­er­ates about a fifth less green­house gases than com­pa­ra­ble petrol en­gines.

Oth­er­wise, the com­pa­nies won’t meet Europe’s tight­en­ing emis­sions stan­dards, and face pay­ing fines as from the start of the next decade.

“We’re con­vinced, like the rest of the car­mak­ing in­dus­try, that we’re headed to­ward elec­tric mo­bil­ity,” Zetsche said. “Un­til that hap­pens, fur­ther re­duc­tions in CO2 we’ll be achieved through com­bus­tion en­gines, and here the diesel will play a sig­nif­i­cant role.”

Daim­ler said a week ago that it will re­call more than 3 mil­lion diesel cars to up­grade ex­haust-sys­tem soft­ware and will book the €220 mil­lion (R3.34 bil­lion) in costs in the third quar­ter.

Sporty mod­els

The cloud over­shad­owed the boon from buy­ers flock­ing to Mercedes’s new suite of sporty mod­els. The group’s sec­ond-quar­ter profit rose 15 per­cent to €3.75bn, the com­pany said yes­ter­day.

Daim­ler shares de­clined 0.1 per­cent to €60.99 as of 11.03am in Frank­furt yes­ter­day. The stock has dropped 14 per­cent this year, valu­ing

Daim­ler, BMW, VW and Ford are work­ing to­gether to es­tab­lish a fast-charg­ing net­work for elec­tric cars.

the com­pany at €65.3bn.

The profit gain came even with a 19 per­cent jump in firsthalf re­search and de­vel­op­ment spend­ing as the man­u­fac­turer gears up to in­tro­duce a line of bat­tery-pow­ered cars.

Daim­ler said in March that it will re­lease 10 new elec­tric ve­hi­cles by 2022, three years ear­lier than a pre­vi­ous tar­get, and the com­pany is work­ing to adapt an en­gine plant to pro­duce bat­ter­ies.

Car­mak­ers’ shares dropped af­ter Der Spiegel mag­a­zine re­ported that Daim­ler and Volk­swa­gen in­formed au­thor­i­ties last year of dis­cus­sions they’d had since the 1990s that also in­cluded BMW.

Over the week­end, the EU’s an­titrust over­seer con­firmed that it is study­ing pos­si­ble col­lu­sion among car pro­duc­ers, to­gether with Ger­many’s reg­u­la­tor.

The al­le­ga­tions have ap­peared to strain re­la­tions in the car in­dus­try, as BMW on Sun­day backed its diesel emis­sions tech­nol­ogy and pointed the fin­ger at ri­vals for not do­ing enough.

Co-op­er­a­tion pacts

Zetsche said that he has not con­ferred with his BMW coun­ter­part, Har­ald Krueger, in the past seven days, but that he ex­pects ex­ist­ing co-op­er­a­tion pacts with peers to con­tinue.

“I’ve not spo­ken to him and I’ve not re­ceived any in­for­ma­tion that on other lev­els there have been any sig­nals of this spec­u­la­tive na­ture,” Zetsche said, re­fer­ring to a re­port in the Ger­man daily Süd­deutsche Zeitung that BMW has sus­pended talks on new projects.

Since about 2008, Daim­ler and its Mu­nich-based ri­val have pur­chased sig­nif­i­cant vol­umes of com­po­nents like wind­screen wipers and tyres to­gether, to­talling some €2bn in an­nual or­ders.

Com­bin­ing pro­cure­ment helps lower prices and gain ef­fi­ciency, and BMW had planned to ex­pand the part­ner­ship. BMW de­clined to com­ment on the news­pa­per re­port.

Daim­ler, BMW, VW and Ford are also work­ing to­gether to es­tab­lish a fast-charg­ing net­work for elec­tric cars along ma­jor Euro­pean high­ways by 2020.

Audi, BMW and Daim­ler bought dig­i­tal-map­ping com­pany Here in 2015 for €2.5bn, and have run it jointly since then.

PHOTO: AP

Daim­ler chief ex­ec­u­tive Di­eter Zetsche ex­pects ex­ist­ing co-op­er­a­tion pacts with peers to con­tinue.

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