Tough times for the automotive industry

The Dieselgate scandal that began two years ago with revelations of emissions-test cheating by Volkswagen has expanded to engulf many of Europe’s most celebrated car brands.

And now three major EU manufacturers – VW, Daimler and BMW – are facing a European antitrust investigation into cartel-like behaviour, following revelations published last week by Der Spiegel.

In recent years, the reputation of the automotive industry has suffered from the ongoing emissions scandal and also a wave of EU antitrust rulings that have led to different parts of the industry being fined more than €5.6bn over the last nine years for widespread market rigging.

Recent fines of auto suppliers have covered everything from car lighting systems, to air conditioning and engine coolant. Another probe is underway into the market for seatbelts and airbags.

Last year the European Commission fined four of Europe’s largest truck manufacturers €2.9bn – the largest total fine handed down by Brussels in an antitrust case. The companies – Iveco, DAF, Volvo/Renault and Daimler – had worked together to fix prices and delay the introduction of emissions technology. Another major manufacturer – MAN – was also involved but escaped a fine by turning whistleblower.

For Philippe Lamberts, co-leader of the Greens in the European Parliament, the probes, along with the emissions test cheating, all point to an “endemic problem”. Namely that nations will always be tempted to take a light touch approach with such a prized industry, leaving it to EU authorities to try and keep Europe’s house in order.

However, the commission’s powers over the car sector are narrow. It is the EU’s top corporate antitrust enforcer, but supervision of whether the auto industry respects environmental rules and other regulations is a largely national matter.

Brussels has argued for greater coordination of this supervision, and also for some centralised powers in the area of emissions-testing. But the commission did very little in response to clear evidence that emissions tests were being gamed.

Your Comments