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Emissions Investigation For Mercedes-Benz Parent Daimler

A Mercedes-Benz logo is seen on a car displayed on media day at the Paris Mondial de l'Automobile, October 2, 2014. REUTERS/Jacky Naegelen

Daimler (DAIGn.DE) shares fell more than five percent on Friday, hit by news that the United States Department of Justice had asked the carmaker to investigate its emissions certification process for vehicles including its Mercedes brand.

The investigation comes six months after the U.S. Environmental Protection Agency said it would review diesel vehicles following an admission from Volkswagen (VOWG_p.DE) that it installed software in cars allowing them to emit up to 40 times legally permissible level of pollution.

Daimler Chief Financial Officer Bodo Uebber declined to elaborate on what prompted the investigation when the company published earnings for the first three months of the year on Friday.

“We cannot go into details,” Uebber told reporters as Daimler said first-quarter operating profit fell 9 percent as launch costs for its new E-Class and currency effects weighed down results.

Faith Based Events

Daimler had said on Thursday that it was cooperating with the U.S. authorities.

“Daimler will consequently investigate possible indications of irregularities and of course take all necessary actions,” the company said.

Analysts said they were surprised that the Department of Justice (DOJ) appears to be acting alone. In the Volkswagen case, the DOJ worked together with the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB).

“There might have been an issue in the US certification process but again, surprising to us that the DOJ is stepping ahead without mentioning the EPA or CARB in our view,” analysts at Evercore ISI said in a note on Friday.

Daimler had previously told analysts at BNP Paribas that it had suffered delays in getting emissions certification for some variants of the GLS and GLC sports utility vehicles, a function of additional scrutiny in the aftermath of the VW scandal.

It was not immediately clear what had triggered the DOJ intervention at this stage.

The EPA said in February it had requested information from Daimler in light of a lawsuit filed by U.S. Mercedes owners but had not opened an official investigation.

Daimler on Friday reiterated that it considered the class action suits to be without merit, adding the company will defend itself with all available legal means.

Rival VW has been plunged into deep crisis by the diesel emissions scandal. Seeking to move on, it has proposed fixing or buying back about half a million polluting cars in the United States at a likely cost of more than $10 billion.

France’s Peugeot Citroen (PEUP.PA) was raided by anti-fraud investigators on Thursday as part of investigations into pollutants in the industry.


In early April, owners of U.S. Mercedes diesel cars filed a new class action saying the vehicles likely contained a “defeat device” used to cheat emissions testing, an accusation that Daimler, which owns the carmaker, denied.

U.S. law firm Hagens Berman, which had already filed a complaint in February, said new tests had shown that Mercedes BlueTEC cars produced nitrogen oxide emissions in virtually all road tests that were far higher than in controlled lab tests.

“The fact that Mercedes passed the dynamometer test in all tests, but failed the real world test, is suggestive that like VW, Mercedes is implementing a ‘defeat device’,” it said in its complaint filed in New Jersey.

The Mercedes BlueTEC system uses urea to help rid exhaust fumes of health-threatening nitric oxides. It is fairly costly and used mainly in heavier cars like Daimler’s large limousines or sports utility vehicles, which are equipped with powerful diesel engines.

A complaint previously filed by U.S. based lawfirm Hagens Berman alleges that Daimler knowingly programmed its so-called clean diesel vehicles to emit illegal levels of nitrogen oxide in low temperatures.

(Editing by Keith Weir)

[vc_message message_box_style=”3d” message_box_color=”turquoise”]By BY EDWARD TAYLOR AND DAVID SHEPARDSONReuters,  SouthFloridaReporter.com, April 22, 2016 [/vc_message]