Germany fines BMW $9.6 million over diesel emissions

The number of vehicles showing irregularities in BMW’s case is far smaller, at just under 8,000. (AFP)
Updated 25 February 2019

Germany fines BMW $9.6 million over diesel emissions

  • Authorities had been probing BMW since early 2018 over suspicions it could have built a so-called ‘defeat device’ into some diesel cars
  • The number of vehicles showing irregularities in BMW’s case is far smaller, at just under 8,000

FRANKFURT AM MAIN: German prosecutors said Monday they had fined high-end carmaker BMW €8.5 million ($9.6 million) over diesel cars with higher harmful emissions than allowed, while adding the infraction was down to error rather than deliberate fraud.
“Munich prosecutors have ordered a fine of €8.5 million for the administrative offense of negligence in quality control,” investigators said in a statement.
Authorities had been probing BMW since early 2018 over suspicions it could have built a so-called “defeat device” into some diesel cars.
Such technologies allow the vehicle to reduce emissions under test conditions, while emitting far higher levels of pollutants such as nitrogen oxides (NOx) on the road.
In Germany, Volkswagen has paid one billion euros in fines over defeat devices following its 2015 admission that it installed them in 11 million cars worldwide, while high-end subsidiary Audi has paid €800 million.
And last week, prosecutors in Stuttgart said they had opened a “fine proceeding” against Mercedes-Benz maker Daimler over the same suspicions relating to 700,000 cars.
But the number of vehicles showing irregularities in BMW’s case is far smaller, at just under 8,000.
Prosecutors said that they believed “mistaken labelling of the part of the motor control software responsible for exhaust treatment” was behind increased on-road emissions.
“Extensive investigations” had found neither evidence of a purposely designed defeat device, nor of intent to commit fraud by BMW employees, they added.
Rather, “the company had not set up an appropriate quality control system” that could have prevented the error or revealed it after the fact, the prosecutors found.
In its most recent financial data release, BMW said it made a net profit of €1.4 billion between July and September, down 24 percent year-on-year as it contended with tough new emissions tests in the European Union.


British fashion linchpin gets post-lockdown trading lift

Updated 48 min 30 sec ago

British fashion linchpin gets post-lockdown trading lift

  • Primark ‘back to business’ as curbs ease, but still faces full-year profit slump

LONDON: Trading in British fashion chain Primark’s reopened stores has been encouraging, but the prolonged coronavirus lockdown means the retailer’s full-year profit is likely to slump by about two-thirds, owner Associated British Foods said.

All 375 Primark stores were shuttered in March as the pandemic spread. As governments eased lockdown restrictions the stores reopened, including all 153 stores in England on June 15.

AB Foods said on Thursday that since the reopening of the first Primark stores on May 4, cumulative sales for the seven weeks to June 20 were £322 million ($403 million) and were 12 percent lower than last year on a like-for-like basis.

It said sales in the week ended June 20, with more than 90 percent of selling space reopened, were £133 million, and trading in England and Ireland was ahead of the same week last year.

“We’re really getting back to business here. That number (down 12 percent) is much better than people were expecting,” AB Foods finance chief John Bason told Reuters.

However, the lockdown means Primark’s profit will be substantially down. The retailer has no online offer.

For the full 2019-20 year, Primark forecast adjusted operating profit in a range of £300-£350 million, down from the £913 million made in 2018-19.

Bason said that Primark has also placed more than £800 million of orders for the autumn/winter season and expects the total to exceed £1 billion.

AB Foods said that overall group revenue from continuing businesses for the 40 weeks to June 20 was 13 percent lower than the same period last year at constant currency.

For 2019-20 it expects “strong progress” in adjusted operating profit at its sugar, grocery, agriculture and ingredients businesses.

The grocery division, whose brands include Kingsmill bread, Twinings tea, Ovaltine and Jordans cereal, had a 9 percent increase in third-quarter revenue, with higher sales through retail channels more than offsetting weaker demand from foodservice businesses closed during the lockdown.

The group expects to end the year with net cash of more than £750 million.