The latest recall to hit the German car industry involves Audi, which is to recall as many as 850,000 cars with diesel engines. The move follows a decision by Mercedes recently to recall three million cars.
Audi says the recall is to update software in Euro 5 and Euro 6 engines to reduce emissions and pre-empt diesel bans in major cities. The cities of Paris, Mexico, Madrid and Athens have pledged to ban diesel cars by 20225. Some German cities are also expected to follow suit.
Bloomberg reports that the recall will be free of charge and will also cover models of the Porsche and Volkswagen brands that have Audi-made engines.
Separately, Reuters reports that EU antitrust regulators are investigating allegations of a cartel among a group of German car makers - a measure that could result in hefty fines for the companies.
The Commission and its German counterpart were tipped off about the possible cartel, the EU competition authority said.
"The European Commission and the Bundeskartellamt (Germany's competition regulator) have received information on this matter, which is currently being assessed by the Commission. It is premature at this stage to speculate further," an EU executive said, without giving more details.
German magazine Der Spiegel has reported that VW , BMW, Audi and Porsche may have colluded to fix the prices of diesel emissions treatment systems using industry committees.
Sixty industry committees made up of about 200 employees are said to have discussed vehicle development, brakes, petrol and diesel engines, clutches and transmissions as well as exhaust treatment systems, Der Spiegel reported, citing a letter sent to cartel authorities.
It said Volkswagen admitted to possible anti-competitive behavior in a letter to cartel authorities on July 4. Volkswagen and Daimler declined to comment on and BMW was not available to comment.
Companies found guilty of breaching EU cartel rules face fines of as much as 10 percent of their global turnover.
The car industry has been hit with billion-euro fines on both sides of the Atlantic in recent years for cartels related to various parts such as lighting systems, engine coolers and bearings.
Audi says the recall will help counteract the proposed ban on diesel cars in cities like Paris and Madrid.
Audi said it aims to maintain the future viability of diesel engines for its customers and to make a contribution towards improving air quality. "At the same time, Audi is convinced that this programme will counteract possible bans," a statement said.
The company, whose engines are also being tested by the German government for possible violations, said it is cooperating with authorities and would make any additional required fixes.
Diesel technology has been under assault since Volkswagen was found cheating on emissions tests nearly two years ago.
Since then, authorities around the world have stepped up their scrutiny of the cars, which burn less fuel than gasoline equivalents but emit smog-inducing nitrogen oxides.
Bloomberg says the investigations have put car makers in Europe, where diesel accounts for roughly half of annual auto sales and tens of thousands of jobs, "in a bind. They need the fuel to have a chance at meeting increasingly tightening environmental targets".
Audi said it is cooperating with authorities and would make any additional required fixes, according to Bloomberg.
