Benz's Own Dieselgate scandal

Mercedes-Benz didn't deliver the best diesel technology, so it might have been better off delivering nothing, and now it's recalling three million cars to fix their emissions problems.

Germany's Dieselgate investigators have begun to seriously turn the screws on the three-pointed star, effectively strong-arming the manufacturer into a €220 million recall to fix its unethical "thermal switch" emissions technology.

"The public debate about diesel engines is creating uncertainty," Daimler Chief Executive Officer Dieter Zetsche said in a statement.

"We have therefore decided on additional measures to reassure drivers of diesel cars and to strengthen confidence in diesel technology.

"The company is investing about 220 million euros. The service actions involve no costs for the customers. The implementation of the measures will be starting in the next weeks," Daimler's statement read.

The "service action" extends a process Daimler began with its smaller diesel cars in March and continued last month with the V-Class vans.

Accused of selling at least a million cars and SUVs in Europe and the US with illegally high NOx emissions, Daimler (Mercedes-Benz's parent company) today ordered a recall, although sources in Germany insist it was forced to order the recall.

A German government investigation committee, set up in the wake of Volkswagen's US$23 billion emissions-cheating scandal, last Thursday summoned Daimler's director of development, Ola Källenius, to a meeting over the car maker's emissions irregularities.

It's a tough call on Källenius, who has been earmarked for great things at Daimler. The Swede might head up the Development side of Daimler, but he's only been in the post since January and was in previous roles as head of AMG or board member for Sales and Marketing. On the flipside, though, the charges against Daimler are likely to be for False Advertising, rather than a technical breach, which would put Källenius back in the spotlight.

The Volkswagen scandal engulfed one of its closest neighbours, Porsche, and one of its closest rivals, Audi, but the fire might be spreading. Faced with continued Daimler denials, German newspaper Der Spiegel wrote that the German Transport Ministry (the KBA) threatened to recall all of Daimler's OM642 (3.0-litre, V6 turbo) and OM651 (four-cylinder turbo) diesel engines, dating back to 2006.

Daimler yesterday denied the Der Spiegel claims, yet a day later it has recalled three million OM642 and OM651 diesel engines...

If that wasn't coincidence enough, Daimler recalled the engines on the same day it finally showed full images of its X-Class pickup and lifted the embargo on its new, high-tech S-Class flagship limousine.

German prosecutors have already searched Daimler's Stuttgart headquarters, while the world's oldest car maker has already set aside billions of Euros of its own to manage any potential fallout.

The Transport Ministry (KBA) instructed Stuttgart's prosecutors to search Daimler for any documents related to its so-called "thermal switching" systems, which turned off its diesel emissions controls below six degrees Celsius and above 26 degrees.

The strategy, defended by Mercedes-Benz as protecting the long-term health of its emissions-cleaning systems by not using them, was a widely used loophole in the European Union's EU 5 and EU 6 rules, with Renault, Opel, Peugeot, Citroen and DS all culpable (but, oddly, not Volkswagen).

Benz models were among more than 600,000 cars recalled by the KBA earlier this year for the "thermal switch" irregularity, discovered initially by a Dutch magazine's real-world test program.

While Mercedes-Benz has always claimed it only played the loophole game and operated within the EU's grey zone, Stuttgart's prosecutors have confirmed they are investigating at least two Daimler engineers over emissions-cheating software on production cars and SUVs.

Prosecutors have said the suspects were not, nor had been, members of Daimler's board, although the investigations weren't isolated to Germany, with the US Department of Justice also collating Daimler diesel certification documentation.

Like Volkswagen, the Daimler emissions-fiddling software is believed by the DOJ to have come from the world's largest car industry supplier, Robert Bosch.

The risk to Daimler's operations is far larger in Europe than in the US, which is mostly a petrol-engined market. More than 70 per cent of European Mercedes-Benz customers prefer diesel engines.

None of this has surprised Greg Archer, the Vehicles Programme Manager at non-profit clean-air lobby group, Transport & Environment. Archer predicted two years ago that Mercedes-Benz was hiding a diesel-emissions dirty secret.

Quoted in Engine Technology International magazine, the lobbyist was shocked by the discrepancy between Benz's NEDC consumption results and its exemption claims for the upcoming real-world test criteria.

He claimed Mercedes-Benz had the greatest discrepancy between the two figures – well over 50 per cent – in the entire automotive industry.

"We don't know enough flexibilities in the test to make them add up to 50 per cent, so something else is going on with Mercedes-Benz," he said.

"I am not saying that means there is a default device but they need to explain how they achieved such low levels in the laboratory and got more than 50 per cent more in the real-world test.

"How they can be producing such incredibly low overall CO2 figures but not when these vehicles are operating on the road? Where are they designed to operate if not on the road?

"From what we know about the different ways manufacturers manipulate the tests, they should not be able to get more than 40-45 per cent difference between test and real-world figures."

The OM642 has been built in Berlin since 2005 for most mid- to-large Benzes, plus the Jeep Grand Cherokee, the Jeep Commander and Australian versions of the Chrysler 300C. The smaller OM651 started production in 2008 and it ranges in size from 1.8- to 2.14 liters and the more powerful versions use two turbochargers.