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Daimler to Recall 3 Million Diesel Cars on Emissions Concern

July 18, 2017
The recall marks a change of approach after the company vowed to fight accusations of cheating by “ all legal means.”

Daimler AG will voluntarily recall more than 3 million Mercedes-Benz diesel vehicles in Europe to address concerns about the emissions systems amid scrutiny from the German government and prosecutors.

The recall, which will be free of charge to customers, will cost the Stuttgart-based automaker about 220 million euros (US$255 million), the company said on July 18.

The plan extends a service action that began in March on some 274,000 compact cars and also included V-Class vans. Germany’s Transport Ministry declined to immediately comment on the recall.

“The public debate about diesel engines is creating uncertainty,” CEO Dieter Zetsche said on July 18. “We have therefore decided on additional measures to reassure drivers of diesel cars and to strengthen confidence in diesel technology.”

Daimler executives last week were summoned to attend a meeting with government officials in Berlin to explain the carmaker’s role in possible diesel-emissions cheating after two engines used in Mercedes vehicles drew increased scrutiny from prosecutors. The recall marks a change of approach after the company vowed to fight accusations of cheating by “ all legal means.”

“This is finally a proactive move to put something on the table and a solid attempt at getting out in front of the debate,” said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler. The cost of the recall is “extraordinarily low” and likely to rise, he said.

Mercedes is one of a number of auto manufacturers targeted in a technology scandal that’s enveloped the industry since Volkswagen AG admitted in September 2015 that it installed software to bypass pollution rules. Hundreds of police officers and prosecutors participated in searches at Daimler sites throughout Germany in May as part of a probe opened earlier this year.

The measures will see almost all of Daimler’s diesel cars in Europe with the so-called Euro-5 and -6 emissions standards receive an upgrade. The plan also includes a “rapid” rollout of a completely new diesel engine family, the carmaker said.

By Elisabeth Behrmann

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