Mercedes-Benz parent company Daimler fined £776m for over-polluting diesel engines

Is it Daimler's turn to be caught up in dieselgate?

THE SHOCKWAVES from the “dieselgate” scandal are still being felt by the car industry, as Mercedes-Benz’s parent company Daimler has been handed a hefty fine for failing to ensure its engines adhere to emissions limits.

Public prosecutors in Mercedes’ home city of Stuttgart have issued the car maker with a penalty of €870m (roughly £776.8m at current exchange rates).

According to the prosecutors, the fee comes after an investigation discovered “a negligent violation of the duty of supervision” in Daimler’s vehicle certification department from 2008 onwards.

This reportedly meant some diesel-powered Mercedes-Benz models were approved by authorities, even though the nitrogen oxide (NOx) emissions of the affected engines “sometimes did not comply with regulatory requirements”.

While the prosecutors didn’t state how many Mercedes-Benz have been fitted with non-compliant engines, it did cite figures from Germany’s vehicle certification body, the German Federal Motor Transport Authority, which suggested approximately 684,000 cars.

This is a slight downgrade on estimates made by the German transport ministry in June 2018, when Mercedes-Benz announced a recall of diesel-powered cars, which suggested up to 774,000 across Europe could be fitted with affected diesel engines.

According to the prosecutors, this administrative offense accounts for €4m (around £3.5m) of the penalty. The remaining €886m (about. £773.3) is to offset the “economic advantages” Daimler benefited from by selling cars that didn’t comply with emissions standards; factoring in the costs the car maker has already accrued retrofitting affected vehicles.

Because Daimler was waived the right to appeal the judgement, the car maker must now pay the fine in full within the next six weeks. All of the money will go to the state of Baden-Württemberg; the province in southwest Germany where Stuttgart is the capital city.

Despite the enormity of the fine (for reference, Porsche and Audi were fined €535m and €800m respectively for their role in the Volkswagen Group’s emissions manipulation scandal), this doesn’t necessarily bring Daimler won’t be penalised again later down the line, as the prosecution office has confirmed its notice will have “no effect” on its investigation against people suspected of involvement in the emissions manipulation of certain diesel-powered Mercedes models.

In a statement, Daimler said: “After weighing all aspects, Daimler has refrained from taking a legal remedy in the public prosecutor’s administrative offense proceeding. It is in the company’s best interest to end the administrative offense proceeding in a timely and comprehensive manner and thereby conclude this matter.”

The car maker went on to say the prosecutor’s penalty will not have a “relevant additional negative effect” on its earnings for its third financial quarter this year, which runs from July to October 2019.

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