German Car Giants Get Cold Comfort From EU Competition Commissioner Ahead of Tariffs

(Bloomberg) -- Germany’s beleaguered car industry brought upon itself the diesel-cheating scandal that spilled over into an antitrust probe, European Union Competition Commissioner Margrethe Vestager warned.

While manufacturers brace for U.S. President Donald Trump to raise levies on car imports, Vestager said her probe into possible collusion between Volkswagen AG, Daimler AG and BMW AG is "making good progress" and would be treated independently of any U.S. decision.

"Whatever our investigation will show, the problem here is the diesel scandal -- and that the car industry brought upon itself," the competition commissioner said in an interview with Bloomberg News the day after she issued Google with a record 4.3 billion euro ($5 billion) antitrust fine.

VW, Daimler and BMW are expecting the EU to step up the investigation and send antitrust objections, which can lead to fines, over German industry talks to fix the size of tanks for AdBlue, a liquid that helps neutralize pollutants in diesel exhaust. The companies are also facing thousands of lawsuits worldwide from disgruntled investors and customers over rigging emissions tests for millions of vehicles.

BMW and VW declined to comment on Vestager’s interview. Daimler had no immediate comment.

German cars are also the focus of an EU-U.S. trade dispute as European Commission President Jean-Claude Juncker meets President Trump in Washington next week in an attempt to stave off or reduce car tariffs. Trump has branded the EU as a trade foe and threatened to tax German car brands Mercedes-Benz and BMW.

"This is not what gives the car industry problems as such, the problems were there and they were there because of the diesel scandal,” Vestager told Bloomberg News. That is “because hundreds of thousands of car owners feel that they were not given or did not buy the product they thought they bought," Vestager said.

Der Spiegel magazine reported last year that VW and Daimler told authorities of possible collusion involving more than 1,000 meetings, dating back more than two decades. Companies cooperated in more than 60 working groups on vehicle technology, costs, suppliers and strategy as well as diesel emissions controls.

Vestager referred to this, saying she consistently stressed that "when we are looking into the alleged car cartel to say we’ve got to be very careful because part of these practices may be fine."

"We will be very careful not to see a cartel everywhere businesses cooperate because it may be a very good idea and it may serve customers well," she said. "I hope that people respect that it takes some time because we don’t want people to see cartels where there are no cartels."

--With assistance from Oliver Sachgau, Elisabeth Behrmann and Leonard Kehnscherper.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Peter Chapman, Anthony Palazzo

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