German’s major automakers were accused in a U.S. lawsuit of acting as a cartel, colluding for nearly two decades to limit the pace of technological advances in their vehicles and stifle competition -- allegations that widen the scope of the latest scandal to hit the nation’s auto industry.
BMW AG, Daimler AG, Volkswagen AG and its Audi and Porsche brands shared competitive information about vehicle technologies with one another from 1996 through at least 2015 in violation of antitrust laws, according to a complaint filed Friday in San Francisco federal court.
"These coordinated actions enabled the manufacturer defendants — the self-named ‘Fünfer-Kreise,’ or Circle of Five — to impose a German automobile premium on consumers premised on superior German engineering, while secretly stunting incentives to innovate," the suit alleges.
The suit, which seeks class-action status on behalf of U.S. drivers, says the companies agreed to limit the development of vehicle systems, including emissions control. The arrangement allegedly led to the development of so-called "defeat devices" used by Volkswagen to cheat on pollution tests.
European companies have been having a tough time in the USA, in much the same way that US companies have been subject to fines in Europe. However, there is no getting around the fact that the automotive sector has been lying to consumers for well over a decade and that there was considerable collusion between brands on how to do so. That is not going to play well in US courts, particularly since environmental considerations are so emotive.
Volkswagen is back testing the lower side of its range for the year. While somewhat oversold in the short term, a clear upward dynamic would be required to question potential for a further test of underlying trading.
Daimler has accelerated lower over the two weeks and has held a progression of lower rally highs since January. A break in that sequence would be required to question medium-term supply dominance.
BMW also exhibits a deteriorating chart pattern and needs to sustain a move above the trend mean to check the slide.