BMW expects EU cartel fine to be a billion euros less than feared

Agence France-Presse

Posted at May 21 2021 08:38 AM

BMW expects EU cartel fine to be a billion euros less than feared 1
The logo of BMW is seen at the LA Auto Show in Los Angeles, California, US November 20, 2019. Lucy Nicholson, Reuters/File Photo

FRANKFURT, Germany - German luxury carmaker BMW said Thursday it expected to get away with a smaller-than-feared fine from EU antitrust authorities for allegedly colluding with other carmakers to avoid competing on clean emissions technology.

BMW set aside around 1.4 billion euros ($1.7 billion) in 2019 for a potential fine, but in a surprise announcement said it now expected the penalty to be about a billion euros less than anticipated.

"Based on the progress of the proceedings, BMW AG expects... that the EU Commission will significantly reduce its allegations against BMW AG in terms of content and duration," the company said.

"This revaluation will result in a positive effect on earnings of around one billion euros in the second quarter of 2021."

As a result, BMW said it was raising its full-year profit margin outlook by "around one percentage point".

The group had earlier forecast a pre-tax margin for its auto segment of six to eight percent.

EU cartel regulators opened a probe two years ago into suspicions that BMW, Volkswagen and Daimler illegally conspired to restrict competition with each other on technologies to reduce harmful emissions, possibly delaying new advances.

The allegations are not linked to the 2015 "dieselgate" emissions cheating scandal that erupted when Volkswagen admitted to rigging millions of vehicles to dupe emissions tests.

The BMW Group, which also includes the Mini and Rolls Royce brands, reported first-quarter net profits of 2.8 billion euros, as global car sales recovered from last year's coronavirus shock.

The Munich-based firm confirmed on Thursday that it expected "a significant increase" in pre-tax earnings for 2021.

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