Daimler recalls three million Mercedes cars

munich — Daimler AG moved to head off a growing crisis over emissions concerns by voluntarily recalling more than 3 million Mercedes-Benz diesel vehicles in Europe, marking the latest blow to the technology since Volkswagen AG’s cheating scandal erupted nearly two years ago.

The automaker will extend an ongoing upgrade of about 250,000 compact cars and vans to nearly every modern Mercedes diesel on the road. The plan, which involves a software patch and avoids complex component fixes, will cost about €220 million ($255 million), the Stuttgart, Germany-based company said in a statement on Tuesday. If accepted by officials, it could help Daimler avoid the massive penalties that beset VW.

“This is about managing diesel’s decline as gently as possible and to get a little bit of reprieve,” said Arndt Ellinghorst, a London-based analyst with Evercore ISI. “That’s not going to change the fundamental direction of the shift in technology.”

Diesel technology, which powers about half of the cars sold in Europe every year thanks to taxes that make the fuel cheaper at the pump, has been increasingly under attack since Volkswagen admitted to duping regulators in September 2015. With diesel crucial to Daimler’s strategy to meet targets for lower carbondioxide emissions, the automaker can ill afford to have the technology further sullied by doubts and allegations.

As well as recalling diesels with Euro-5 and -6 emissions standards, the manufacturer also plans a “rapid” rollout of a completely new diesel engine family, the carmaker said. — Bloomberg