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MERKEL ON THE ROCKS: German car industry scandal threatens to destabilise ...

cars germany emissions scandal vw audi bmwGETTYThe future of Germany's scandal-hit car industry appears very uncertain

Auto giants Daimler, Volkswagen and BMW were all hit with lawsuits accusing the companies of colluding illegally to drive up the prices of their cars in the US and Canada - but this is just the latest in a series of failures that could spell the end of the dominance of German firms.

Attorney David Wingfield said in a statement: "If the allegations in the claim prove to be true, then Canadian consumers have been harmed by a long-standing cartel of German car manufacturers to provide inferior components in their vehicles while charging premium prices for these vehicles.”

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While in Brussels EU officials are set to look into claims Audi, BMW, Mercedes-Benz, Porsche and Volkswagen have been colluding on technology for years after allegations emerged in German magazine der Spiegel claiming manufacturers worked together to disguise the true polluting levels of their vehicles.

Acting on evidence provided by a former Volkswagen employee, the EU has opened the cartel investigation following claims that up to 200 employees at the car giants were involved in secret closed-door meetings.

Those involved in the alleged meetings are said to have swapped vital information on methods to avoid certain test procedures for CO2 and emissions.

The European Commission confirmed it was assessing information on the alleged collusion, but added it was “premature at this stage to speculate further".

In response, German economics minister Brigette Zypries said the allegations and the resulting EU investigation could seriously threaten the country’s car industry.

She said: “What’s at stake here is nothing less than the credibility ... of the whole German car industry. Without comprehensive clarification, confidence cannot be restored.”

She added she was taking the der Spiegel accusations “very seriously” and said all carmakers implicated would be “well advised to fully co-operate with the authorities and ensure transparency”.

Shares in Germany’s biggest car manufacturers plunged in light of the allegations and with some

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