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Daimler Issues Third Profit Warning as Diesel Woes Grow
Daimler AG says its operating earnings this year won’t grow after all because of ballooning regulatory costs related to diesel emissions.
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Daimler AG says its operating earnings this year won’t grow after all because of ballooning regulatory costs related to diesel emissions.
The company has declined to clarify which issues are causing what it expects will be a “high three-digit million euro” charge to be taken in the current quarter.
The profit warning, its third in 12 months, comes after Daimler confirmed it has been ordered to recall 60,000 diesels in Germany that were equipped with software used to rig emission test results. The investigation by KBA, Germany’s federal transport authority, was revealed in April.
The new recall targets 2012-2015 model Mercedes-Benz GLK 220 small SUV/crossover vehicles. Daimler previously had been ordered by KBA to update the software in 700,000 of its diesels to lower nitrogen oxides (NOx) emissions.
The transport authority says it is investigating additional models suspected of using similar illegal software. Daimler has strongly denied any wrongdoing.
Reuters notes that in April the European Commission also has accused BMW, Daimler and Volkswagen Group of conspiring to delay the introduction of technology used to cut diesel emissions of NOx. Daimler, which was a whistleblower in the two-year-long investigation, hopes to avoid fines.
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