Daimler shares are marked down sharply on news of a probe into the Mercedes parent company's emissions. As Hayley Platt reports, the carmaker's also taken a hit from a 9% drop in Q1 operating profits.
It's not been a good week for automakers. First was Mitsubishi's confession to cheating fuel consumption tests. Now Daimler, maker of Mercedes, has been asked by the US Justice Department to investigate its own diesel emissions certification process. The news sent shares down 5 percent. (SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING: "If the Department of Justice finds something within the Daimler files as they found in the Volkswagen files and we've also had out of the Japanese market in recent days then the share price is going lower." Nothing has been revealed in Daimler's files and it says it is cooperating with the request. But the news comes along with a fall in Daimler's first-quarter operating profit of 9 percent. Sales weren't too bad but an expensive launch for its new E-Class and currency fluctuations were enough to dent profits. (SOUNDBITE) (German) HEAD OF CAPITAL MARKETS ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "It's crucial for them to prove that they haven't rigged cars in America and to continue to gain traction in the mass market, because you can't drive premium vehicles well into in the long-term." The emissions cheat scandal began with Volkswagen's admission last September. It's estimated that could cost more than $10 billion in the US alone. And there have been others. The pressure on the industry could see some firms consolidate. (SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING: "If for example if Mitsubishi is seen to be particularly weak or Honda or whichever company is next in the firing line from the Department of Justice. In the grand scheme of things hopefully it leads to cleaner energy technologies that actually work." In February and again earlier this month Mercedes diesel owners filed a class-action lawsuit in the U.S. It said the vehicles likely contained a "defeat device" used to cheat emissions testing. Daimler denies the accusation.