Prosecutors in Stuttgart are set to fine Mercedes-Benz parent Daimler between €800m and €1bn for diesel- related violations, German magazine Der Spiegel has reported.
German motor vehicle authority KBA had discovered cheating software fitted to Mercedes-Benz C-Class and E-Class vehicles and ordered the carmaker to recall 280,000 vehicles, Der Spiegel said. A fine of up to €5,000 per vehicle is being considered by the Stuttgart prosecutor, the magazine said.
A spokesman for the prosecutor’s office said the investigation was ongoing and would not be concluded before the end of the year. Daimler declined to comment while the investigation was under way.
In May 2017, German prosecutors searched Daimler offices as part of a fraud inquiry related to possible manipulation of exhaust gas after-treatment in diesel cars.
Daimler also faces regulatory scrutiny by US authorities. In February 2016 the US Environmental Protection Agency asked Mercedes-Benz to explain emissions levels in some of its diesel cars.
Prosecutors in Germany have used administrative orders to impose fines on Volkswagen, Audi, and Porsche, blaming senior management for oversight lapses which allowed emissions cheating.
In May, Stuttgart prosecutors fined Porsche €535m and supplier Bosch €90m, while prosecutors in Braunschweig fined Volkswagen €1bn and Munich prosecutors imposed an €800m fine against Audi.
Meanwhile, German exports registered their steepest annual decline in three years in June, underscoring the plight of the manufacturing sector as global trade tensions escalate.
Shipments abroad were down 8% from the previous year, the most since July 2016. Imports, a gauge for the strength of the domestic economy, fell an annual 4.4%.
The data adds to evidence that export-reliant businesses are hurting badly, threatening to bring Europe’s largest economy to a halt. Once a growth driver in the region, Germany is forecast to expand a mere 0.5% this year, with only Italy seen faring worse.
There are few if any signs of imminent improvement. The US and China, two of Germany’s key trading partners, remain locked in a war over import tariffs. The former recently announced its biggest hike in levies yet, prompting the latter to respond by allowing its currency to tumble to its lowest value in more than a decade.
Germany is caught in the middle. Big-name companies including Continental, Daimler, BASF, and Lufthansa have slashed their outlooks recently, amid global geopolitical uncertainty.
Reuters and Bloomberg