Photo: BMW
Investigated for having ganged up with Volkswagen and Daimler to delay the implementation of clean-emissions technologies in recent years, BMW is gearing up for a severe financial storm in the coming months.
The European Union, through the European Commission, is investigating the three carmakers for having formed a cartel with the goal of denying “consumers the opportunity to buy less polluting cars,” namely by holding back the implementation of cars fitted with selective catalytic reduction systems and particulate filters. The investigation into this matter began in September last year.
In a series of statements released last week, BMW denied all allegations of the Commissions report, which was sent to the three carmakers on Friday. BMW said it plans to fight the EU's allegations by all means necessary, but until then it is gearing up for the worst.
A financial impact is to be expected for BMW, as the group believes “that it is probable (more likely than not) that the EU Commission will issue a significant fine.”
“Therefore, following its review of the Statement of Objections, the BMW Group will recognise a provision, which is likely to exceed €1 billion,” said BMW in a statement on Friday.
“This effect will negatively impact the financial results in the first quarter of 2019. The company’s review of the Statement of Objections and the inspection of files will take some time. As a result, a final evaluation of the financial impact is currently not possible.”
The other two carmakers involved, Volkswagen and Daimler, seem to be far less affected by the investigation, which will soon come to a close. VW only said it is cooperating with authorities, while Daimler, as the whistleblower in this case, said it is not expecting any fines.
As a result of the latest developments, BMW’s stock dropped 2 percent on Monday, according to Bloomberg, while Volkswagen and Daimler lost 1.4 and 1.6 percent, respectively.
In a series of statements released last week, BMW denied all allegations of the Commissions report, which was sent to the three carmakers on Friday. BMW said it plans to fight the EU's allegations by all means necessary, but until then it is gearing up for the worst.
A financial impact is to be expected for BMW, as the group believes “that it is probable (more likely than not) that the EU Commission will issue a significant fine.”
“Therefore, following its review of the Statement of Objections, the BMW Group will recognise a provision, which is likely to exceed €1 billion,” said BMW in a statement on Friday.
“This effect will negatively impact the financial results in the first quarter of 2019. The company’s review of the Statement of Objections and the inspection of files will take some time. As a result, a final evaluation of the financial impact is currently not possible.”
The other two carmakers involved, Volkswagen and Daimler, seem to be far less affected by the investigation, which will soon come to a close. VW only said it is cooperating with authorities, while Daimler, as the whistleblower in this case, said it is not expecting any fines.
As a result of the latest developments, BMW’s stock dropped 2 percent on Monday, according to Bloomberg, while Volkswagen and Daimler lost 1.4 and 1.6 percent, respectively.
Google News