VW, BMW And Mercedes Raided! Another Scandal Unearthed?

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Six German carmakers and parts suppliers including Mercedes-Benz, BMW and the Volkswagen Group, were raided by German regulators in a probe about the purchase of steel by the auto industry in the country.

The three carmakers along with parts suppliers Bosch and gearbox makers ZF confirmed the news to Bloomberg that their offices were raided and have stated that they are cooperating with investigators.

The raids were conducted by the German Federal Cartel Office which is investigating if any anti-trust rules were breached.

The Federal Cartel office suspects that the companies may have potentially colluded together, to illegally manipulate the price of steel.

According to the World Steel Association, carmakers on average, use 900 kilograms of steel on every vehicle that comes out of their manufacturing plants. Steel still accounts for a third of the price of a car.

If the companies are found guilty of the charge they could end up facing fines of up to 10 percent of their global revenue.

If one takes the example of the VW Group, which earned 213.29 Billion (Rs. 15.8 Trillion) in the financial year 2015, the fines itself would amount to 21.329 billion Euros (Rs. 1.58 Trillion).

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Story first published: Friday, July 8, 2016, 20:15 [IST]
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