With a billion-dollar fine and the huge number of recalled vehicles, will the emission fraud scandal drag down Mercedes-Benz like it did Volkswagen back in 2015?
Mercedes-Benz faces heavy fine for fraud
German Der Spiegel magazine reported on last Friday that Daimler, the owner of Mercedes-Benz, is facing a fine of EUR3.75 billion ($4.37 billion) for using illegal software to manipulate diesel emissions.
Accordingly, the magazine’s report comes after Andreas Scheuer, German Federal Minister of Transport and Digital Infrastructure, questioned Daimler at a closed-door meeting over how many Mercedes-Benz vans and cars need to be fixed after an inspection found illegal software in one of its models.
Scheuer expressed concerns that 750,000 Mercedes vehicles could be affected and the ministry could impose a fine of up to EUR5,000 ($5,834) per vehicle.
The German car maker last month was also ordered by the German motor vehicle authority (Kraftfahrt-Bundesamt–KBA) to recall its 1.6-litre diesel Vito vans for violating emissions regulations.
According to Consumer Report, C-Class vehicles “enjoyed” the highest rates of recalls in the Mercedes-Benz portfolio in 2013-2017. Specifically, the firm recalled 5.77 of every 100,000 vehicles sold.
Phapluatplus.vn stated that Mercedes-Benz Vietnam (MBV) announced eight rounds of recalls this year. The latest recall was in early May, when MBV announced recalling 7,000 vehicles between May 14 to December 31, 2022 to handle electric system flaws.
Following Volkswagen into ignominy
In 2015, Volkswagen was found to have purposely programmed its turbocharged direct injection (TDI) diesel engines to activate emission controls only during laboratory emissions testing, which lowered the vehicles’ NOx (a generic term for the nitrogen oxides that are most relevant for air pollution, namely nitric oxide (NO) and nitrogen dioxide (NO2)) output to meet US standards during regulatory testing, while during normal driving the cars emitted up to 40 times more NOx.
After the violation saw light, the German automaker had to pay a fine of $18 billion in the US, and spent $8 billion to recall vehicles equipped with violating software.
In the aftermath of the scandal, Volkswagen’s CEO Michael Hornwas forced to resign and the corporation saw significantly reduced revenue and conceded its leading position in the world to Japanese car manufacturer Toyota.
However, emissions violations were uncovered not only at Mercedes-Benz and Volkswagen, but BMW as well. In an announcement on July 22 last year, the European Commission (EC) confirmed to the German Der Spiegel magazine that the institution has been investigating frequent meetings among the car brands’ representatives to agree on technical specifications on grips, engines, and emission systems.
The magazine also stated that there has been an unspoken agreement between the sides since 1990.
At the time, the spokesmen of Volkswagen, Mercedes-Benz, and BMW declined to comment on this.