Further funds have been allocated to cover an EU investigation into alleged collusion by the continent’s biggest truck manufacturers
The Volvo Group has announced plans to set aside an additional €250 million (A$371 million) in a move that indicates the company is anticipating the European Union’s ongoing collusion investigation to have a strict finale.
One of six manufacturers facing what could be the biggest cartel fine in history, Volvo says the decision to bolster its allocated funds is in response to the EU’s preliminary standpoint which contends it, Iveco, Daimler, MAN, DAF, and Scania breached EU antitrust laws up until January 18, 2011.
Initially setting €400 million (A$594 million) aside in the last quarter of 2014 after the commission laid out its charges and suggesting it will re-evaluate the provision as the investigation continues, the latest move by Volvo would mean the investigation isn’t travelling in the manufacturer’s favour.
“The provision made by the Volvo Group total €650 million (A$965 million) and is based on the company’s best assessment of the financial impact of the investigation at the present time,” Volvo says in a statement.
“The investigation is ongoing and the Volvo Group is cooperating fully with the authorities involved.”
Charged with allegedly colluding to delay emissions technology and fix prices, a number of the manufacturers have been allocating funds to the investigation.
It is believed DAF has set aside $945 million (A$1.3 billion), Daimler has accrued $672 million (A$934 million), and Iveco $500 million (A$695 million).
MAN is considered, by reports, to be the whistle-blower and therefore may escape any financial penalty.
The final player, Scania, has not announced any preliminary measures.
The investigation follows company behaviour from 1997 till 2011, and, if breaches are found by the EU, the fines can be as high as 10 per cent of a company’s global income.
This could mean a fine over €10 billion (A$15.5 billion).