Daimler tries to dispel Dieselgate fears

Daimler held its annual general meeting in Berlin on Wednesday, with the group's board trying to allay shareholders' fears after the carmaker was dragged into rival Volkswagen's emissions-cheating scandal.

German prosecutors announced last week they had widened their emissions affair probe to include a fraud investigation into some employees at Daimler, the Stuttgart-based manufacturer of luxury Mercedes Benz cars.

"Can you give us an assurance that we are not going to be a Volkswagen 2?" asked Marc Tuengler from the German investor association DSW.

Daimler chief executive Dieter Zetsche said German regulators and the transport ministry "have not found breaches of the law in measurements of our vehicles." He called for "clear rules and transparent testing procedures" to allay the public's concerns while promising "full cooperation" with the authorities.

'No impact on business'

Stuttgart prosecutors said last week they were investigating Daimler employees on suspicion of fraud and misleading advertising in relation to the selling of diesel-powered vehicles. The Daimler probe added to the extensive list of investigations connected to the scandal, which broke in September 2015 when Volkswagen admitted that the company had equipped more than 11 million vehicles around the world with special software aimed at cheating emissions tests.

The US Department of Justice called on Daimler last year to launch an internal investigation into whether the VW emissions scandal impacted on its operations in the United States. In addition to Volkswagen and its luxury offshoot Audi, German auto supplier Bosch, along with French carmaker Renault and Italy's Fiat, have come under the scrutiny of investigators.

Daimler said the probe into its involvement in the diesel emissions scandal has so far had no impact on business, with the group expecting to post record first-quarter sales. Even without the final figures for March, group sales jumped 15.6 per cent in the first two months of 2017 compared with the same period last year, Daimler said.

In February, the carmaker reported record results for 2016, booking almost 9 billion euros ($9.7 billion) in profit on revenues of 153 billion euros and becoming the world's largest luxury carmaker by unit sales.

But investors complain that dividend payments are not keeping pace with the carmaker's growth, as the big investments needed to fund the companies long-term strategy eat into profitability.

More electric vehicles

Daimler announced in Berlin it would speed up development of electric vehicles, aiming for 10 new models within five years rather than eight. It will also invest 1 billion euros in battery production, half of it going to its facility in Saxony, eastern Germany.

"Emissions-free driving is at the center of our strategy. In the coming years we will spend 10 billion euros on building up our electric fleet," CEO Zetsche said, promising battery-powered versions of vehicles from the tiny Smart to Mercedes SUVs by 2022.

Until now, the Stuttgart-based firm had promised the expansion of its electric range would be completed by 2025, with between 15 and 25 percent of Mercedes cars sold to be electric by that date.

But "no one can say for certain how long it will take for electric cars to outnumber conventional motors on the market," Zetsche said, promising to "use all available means to reduce carbon dioxide" emissions, including more efficient combustion engines and "modern" diesels "emitting significantly less CO2 than petrol engines."

bea/hg (dpa, AFP)