World Economy

EU to Fine Top Truckmakers

EU to Fine Top TruckmakersEU to Fine Top Truckmakers

EU regulators are set to impose a record fine this week on several of Europe’s biggest truckmakers that are accused of colluding to rig higher prices, sources close to the matter told AFP.

Volkswagen-owned MAN and Scania, as well as Daimler, DAF, Iveco and Volvo are accused by the European Commission of running a cartel from 1999 to 2011. A spokesman for the commission, the EU’s regulatory arm, refused to comment.

If confirmed, the fine will be the second major decision this month by Margrethe Vestager, the EU’s powerful competition commissioner, who last week filed new anti-trust charges against US Internet giant Google.

The rap sheet against the five European companies would also counter accusations by Washington that Vestager unfairly targets US firms.

The investigation is based on raids carried out on large truck manufacturers in 2011, based on a tip-off by MAN.

The charge sheet includes accusations of price-fixing, but also alleges the existence of a secret agreement by the companies to delay the introduction of anti-pollution technology.

This accusation, first revealed by the Financial Times, could prove the most embarrassing in the wake of revelations last year of pollution test cheating by Volkswagen that has rocked the auto industry.

Volvo Trucks last month increased its provision in regards to the case to a total of €650 million ($749 million), in a sign that the final decision by the EU was imminent.

Daimler in 2014 already set aside €650 million in connection with the case. But MAN and Scania have not provisioned for the case, with expectations high the groups will be largely spared by the EU after providing key evidence on the cartel.

The commission’s existing record of a €1.5 billion fine dates back to 2012. Seven television and computer screen makers, including LG Electronics and Philips, were found guilty of running a decade-long price-fixing scheme.

  Orders Slump

Volvo cut its outlook for the North American truck market for the third time this year after orders slumped nearly one-third in the second quarter, as other key markets also declined, Bloomberg reported.

Truck orders in North America fell 29%, and manufacturers as a whole will probably sell about 240,000 vehicles there this year, the Gothenburg, Sweden-based company said Tuesday in a statement. That’s 10,000 less than its previous forecast and would be 20% fewer than in 2015. Europe failed to offset the drop, as orders in the region fell 2% in the second quarter.

Slowing demand in the US and the Middle East and recession in Brazil have wreaked havoc on truck makers’ expectations for the year. Daimler cut its trucks forecast in May, saying profits will be “significantly lower.”