Features
26 Sep 18

The OEM Cartel for not going green

First there was Dieselgate, then there was Partneo, and now there is the suspicion of OEMs forming cartels to lower down their ambitions for green technology. 

After Dieselgate and the Partneo story, you would have thought that the OEMs learned that the truth will always come out, but unfortunately they have not. 

At the moment the European Commission is investigating if German OEMs made deals to lower their ambitions for green technology. The Commission received information suggesting that BMW, Daimler and various brands of the Volkswagen Group (Volkswagen, Audi and Porsche) agreed on the kind of technologies to use to make cars more sustainable. 

Together they are reported to have set up a system to reduce the emissions of diesel cars, such as particulate filters for petrol cars, but that system might not have been the best or most sustainable one currently available on the market.  

If this information is verified, the commission judges that the OEMs denied the access to more sustainable technology to its clients, despite its existence. 

The commission is investigation the case of BMW, Mercedes-Benz and Volkswagen, while two OEMs would have requested immunity in exchange for information. 

Penalties

Although the investigation is not related to Dieselgate, it does remind us of it, since once again OEMs might have provided misleading information towards the customers with regard to sustainable vehicle technology. If the information can be verified, the concerned OEMs could incur new penaltieson top of those for their involvement in Dieselgate. Additionally, in the aftermath of Dieselgate, the OEMs had to pay for retrofitting the sold vehicles, and hence comply with their promises.

Cartels

The story also reminds us of the Partneo story. Various carmakers used the pricing software Partneo, sold by Accenture, to set parts prices as high as possible, up to the maximum price the customer would be willing to pay. As a result, Renault, Jaguar, Land Rover and Peugeot have boosted their revenus by over $1 billion in just the past decade. 

Nevertheless, all concerned companies considered their strategy as legal and commercially justified. And France’s competition regulator said – after examination of the software – not to see a reason to open a full anti-trust investigation.

Whether the current investigation will result in additional penalties for the OEMs or will have no consequences as in the Partneo story remains to be seen.

Authored by: Fien Van den steen