This article is more than 3 years old

This article is more than 3 years old

The whiff of scandal around the German car manufacturing industry may be set to intensify, as Volkswagen prepares to hold a top-level meeting to discuss allegations that carmakers colluded to bring down the cost of components – including some used to control diesel emissions.

Volkswagen confirmed it is to hold a special supervisory board meeting on Wednesday but declined to give further details. A source familiar with the matter told Reuters the meeting would address claims it was among German carmakers operating a wide-ranging cartel.

The European commission said on Saturday antitrust regulators were investigating a possible German automotive industry cartel after a tipoff.

At issue is whether VW, Audi, Porsche, Mercedes and BMW used German car industry committees to discuss pricing of components and technologies and whether such talks constituted anticompetitive behaviour.

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Shares in German automotive companies took a hit in early trading on Monday, weighed down by uncertainty over possible antitrust fines.

VW shares were down 2.8%, with Daimler and BMW down 3.4% and 2.5% respectively, lagging the blue-chip DAX index, which was 0.7% lower.

Exane BNP Paribas automotive analyst Stuart Pearson said little was known about the allegations, but no signs had emerged about fixing prices charged to consumers.

“More ugly details could yet emerge, leaving German manufacturers – and the EU auto sector – still firmly in the sin bin for now,” he added.

The car industry has been fined billions of euros on both sides of the Atlantic in recent years for cartels related to various parts such as lighting systems, engine coolers and bearings.

The industry’s record on exhaust emissions is also under close scrutiny after VW admitted in September 2015 to cheating US diesel emissions tests, with investigations showing many vehicles exceeding pollution limits outside of testing labs.

On Friday, the German magazine Der Spiegel said VW, its Audi and Porsche brands, BMW and Mercedes owner Daimler may have colluded to fix prices on components, including of diesel emissions treatment systems, using industry committees. According to Der Spiegel, discussions had been ongoing since the 1990s.

Der Spiegel said the talks also led to the use of smaller tanks containing AdBlue, a urea-based liquid needed to help filter nitrogen oxides (NOx) from diesel emissions. Larger tanks would have been more expensive, the magazine said.

Auto industry experts, however, have said the effectiveness of exhaust filtering systems does not depend on the size of an AdBlue tank. BMW, for example, has equipped its cars with urea injection as well as a NOx-storage catalytic converter. The two systems combined ensure vehicles fulfil emissions requirements.

BMW on Sunday said emissions filtering systems in its cars were adequate and that discussions with other manufacturers about AdBlue fluid were held with a view towards building a pan-European network of AdBlue refilling stations.

Daimler said on Monday it had a substantial compliance programme which was “constantly improved and adapted”. Michael Brecht, Daimler’s works council chief, demanded an immediate investigation into the allegations.

Manufacturers have continued to recall vehicles since the diesel emissions scandal broke. Daimler last week announced it was recalling 3m Mercedes-Benz diesels to improve their emissions performance through an update of engine control software. Volkswagen’s Audi brand will recall 850,000 vehicles for similar tweaks.

Calls to ban diesel vehicles from cities have grown in number around Germany itself, where air pollution levels have exceeded legal limits in urban areas this summer. The German government has called a “diesel summit” meeting next week between local officials and the car industry to find ways to reduce and ensure that diesel technology has a future.

The car industry argues it originally responded to incentives set by governments to develop diesel engines as a way of lowering overall carbon emissions to meet climate change targets. However, diesel emissions of nitrogen oxides have proved more harmful to people’s health.

The effects have come under increased scrutiny since Volkswagen admitted to using illegal software in its diesel engines to cheat emissions tests. The carmaker is set to pay more than $20bn in US fines and settlements.

Subsequent research has shown that real-world emissions in virtually all diesels are far higher than lab tests showed. German brands Mercedes-Benz, Opel, Volkswagen, Audi and Porsche last year agreed to recall a total of 630,000 diesel vehicles in Europe in response.