The Hits Keep Coming: Daimler Looking at $1 Billion Diesel Fine, Report Claims

Suspected emissions manipulation could net Daimler AG, parent company of Mercedes-Benz, a steep fine, but it seems the automaker already anticipates the expenditure. According to a report out of Germany, the auto giant stands to face a fine potentially topping $1 billion, which is a relative bargain compared to the bill handed to rival Volkswagen Group over its widespread emissions cheating.

It’s bad news Daimler doesn’t need in these turbulent times.

The magazine Der Spiegel (via Reuters) reported Friday that prosecutors are considering levying a fine of 800 million to 1 billion euros ($895 million to $1.1 billion) after finding unauthorized software fitted to a large crop of C- and E-Class vehicles. The fine would amount to 5,000 euros per car.

When contacted, German motor vehicle regulator KBA wouldn’t comment, citing the ongoing nature of the investigation. German prosecutors must be in short supply, given the surge in demand for them following the VW dieselgate scandal of 2015. The pressure is on, and Daimler could be the next to suffer financial hardship for allegedly making its diesel vehicles more palatable to consumers through less-than-legal means.

Certainly, Germany isn’t bashful about slapping its own companies. VW, Porsche, and Audi all paid a steep price for involvement in the dieselgate affair.

It isn’t just illegal defeat devices worrying German automakers these days. There’s also the question of what to do with diesel cars that, just a few years ago, were deemed perfectly acceptable for use on the country’s streets. Now that cities are allowed to ban vehicles that conform to outdated emissions rules, keeping daily drivers viable is another source of frustration.

Earlier this week, Mercedes-Benz said it would offer a subsidy of $3,350 to owners of older Benzes to retrofit their older, Euro 5 diesel vehicles into compliance. The first kit, aimed at reducing smog-causing nitrogen oxide emissions, targets the E-Class range.

After issuing a profit warning on July 12th Daimler announced a second-quarter operating loss of $1.79 billion on July 24th, citing one-off charges totalling over $4.7 billion. Revenue, however, came in above expectations. Daimler made it clear in its profit warning that it fully expects hefty fines, with money put aside to deal with the matter.

Over in the U.S., Mercedes-Benz finds its fortunes headed in opposite direction of its rival, BMW. Sales of all M-B vehicles, including the Smart range and its commercial vans, sank 4 percent through the end of July. BMW, on the other hand, posted a 2.3 percent sales increase over the same period.