German carmakers faced a brewing scandal Monday as suspicions grew they colluded illegally for decades, further damaging the industry's image and exposing it to massive financial risks.

News weekly Der Spiegel reported Friday that German carmakers Volkswagen, Audi, Porsche, BMW and Daimler secretly worked together from the 1990s on car development, construction and logistics -- including how to meet increasingly tough diesel emissions criteria.

Both buyers and suppliers of the auto giants suffered from the under-the-table deals, the magazine alleged.

For the world's largest carmaker Volkswagen, the diesel emissions scandal alone has already cost tens of billions of euros since 2015.

The Wolfsburg-based firm, along with Mercedes-Benz parent Daimler, was among the first to hand over details of the alleged broader collusion between the five firms to competition authorities, reported Spiegel, saying it had seen a relevant VW document.

Regulators often treat the first company to report such infringements more leniently than the rest.

And Daimler has experience: it suffered a billion-euro fine from Brussels last summer for fixing truck prices with competitors.

In theory, the European Commission or Germany's federal competition authority could fine firms 10 percent of annual revenue -- or close to 50 billion euros ($58.3 billion) across all five car companies, based on 2016 sales.

On top of that would come individual claims from customers, possibly numbering tens of thousands of euros.

- No inquiry yet -

It could be some time before the full details of the automakers' cooperation come to light.

Both Brussels and German authorities say they have received information on the possible agreements between the firms.

These are now "undergoing examination by the Commission," the EU's executive arm said Saturday, while adding that it would not "speculate further" on the outcome.

Volkswagen has said nothing, although its supervisory board is set to meet on Wednesday, while Daimler insisted that it applies an internal competition law compliance programme.

Munich-based BMW on Sunday denied any collusion with competitors on diesel emissions cheating.

Among the areas Spiegel reported manufacturers collaborated on in its report Friday was the size of tanks for a liquid known as AdBlue, used to treat diesel exhaust fumes.

The fluid reacts with harmful nitrogen oxides found in the emissions and transforms them into water and nitrogen.

But carmakers agreed not to add tanks to their vehicles, Spiegel reported, preferring to save space for golf bags or profitable upgrades such as speaker systems.

Rather than call on drivers to refill tiny AdBlue tanks every few thousand kilometres, Volkswagen built systems into vehicles that reduced exhaust treatment unless software detected the car was undergoing regulatory tests.

Other manufacturers including Daimler are suspected of doing the same.

"If this turns out to be true it would cost tens of billions of euros altogether, and single-digit billions for each manufacturer," analyst Frank Schwope of Nord/LB bank told AFP.

The reports have also spooked investors, with car industry stalwarts trailing on the DAX index of blue-chip German shares Monday.

Volkswagen shares shed 1.4 percent, Daimler was down 2.7 percent while BMW was the worst performer on the table as it slumped 2.8 percent.

- 'Total meltdown' -

"In the context of the diesel scandal, forbidden agreements are a kind of total meltdown for the credibility of the German car industry," said Stefan Bratzel of the Center of Automotive Management, located outside the western German city of Cologne.

The report has forced Germany's biggest industrial sector -- and Berlin officials often accused of being too cosy with carmakers -- into damage control mode.

"Strict respect for competition law has for many years been part of our work," Matthias Wissmann, chief of the VDA industry federation told business daily Handelsblatt.

While "the allegations have to be investigated fully," people "shouldn't make a generalised judgement about the whole industry," he added.

"Of course, everything must be uncovered unsparingly," a spokeswoman for Chancellor Angela Merkel told journalists in Berlin -- while recalling that competition authorities work independently of the government.

In the political arena, lawmakers are gearing up for an election in late September and are unlikely to leave the car industry theme aside.

Centre-left challenger for the Chancellery Martin Schulz warned that if true, the collusion "would be a gigantic fraud at the expense of customers and suppliers, many of them small- and medium-sized businesses."

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Volkswagen fined $154 mn more in US for dieselgate
New York (AFP) July 20, 2017
Volkswagen must pay an additional $154 million to California to settle state environmental charges in the latest penalty in the scandal over its use of emissions "defeat devices," regulators announced Thursday. The sum is on top of $533 million VW already paid to California in the so-called dieselgate conspiracy, in which software allowed cars to pass emissions tests, while still spewing ni ... read more

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