Future trade war between Germany and USA ?
According to the report in Germany's Bild am Sonntag newspaper, several tests by the German government's motor vehicle authority KBA found evidence that the emissions control systems in some of FCA's products would switch themselves off after 22 minutes of operation. The newspaper noted that government emissions tests typically run for about 20 minutes.
FCA officials were summoned to a KBA hearing on the investigation last week, as were officials from General Motors (NYSE:GM) subsidiary Opel. But unlike Opel, which promised full cooperation, FCA didn't attend. It doesn't acknowledge that the German government has jurisdiction over its vehicles. It said its cars have passed all tests conducted by the relevant Italian government agency, and it told the German regulators that they should take any complaints to their Italian government counterparts.
It's believed that VW cheated because its engineers couldn't figure out how to make a diesel engine comply with tightening emissions regulations without compromising performance or adding expensive emissions-control hardware. Their "solution" was to disable some of the cars' emissions controls during normal driving, which gave the engines better performance and fuel economy.
Is it possible that FCA's engineers faced a similar conundrum and came up with their own workaround? It is definitely possible. But it's also worth noting that the charges against Volkswagen started with U.S. regulators, and there has been some sentiment in German business circles that the U.S. charges were an effort to hurt VW's competitive standing in order to benefit American automakers.
It's possible that sentiment played some part in the German government's decision to target Fiat Chrysler and GM's Opel unit. So far, there doesn't seem to be a whole lot of evidence to support the suggestion that GM was cheating. But if these reports are true, FCA will have some hard questions to answer.
But two thoughts come to mind. First, this could be a headache for FCA in Fiat's home market, one that could be exacerbated by the company's refusal to cooperate so far. Second, if there really is a tit-for-tat element motivating the KBA's investigations, and a desire to push back on the aggressive American action against VW, Ford might well be up next.