Germany ordered Monday the recall of some 774,000 vehicles from Mercedes-Benz maker Daimler across Europe, citing illegal "defeat devices" created to hide high levels of harmful emissions from regulators´ tests.
The Kraftfahrt-Bundesamt said 238,000 vehicles in the country have unauthorised software fitted and has demanded that they are fixed immediately by the auto maker.
Germany's road vehicle authority, KBA, has found five "illegal switch-off devices" in Daimler engines, the Bild am Sonntag newspaper reported on Sunday.
It added that a total of 774,000 Mercedes vehicles being used across Europe contain the defeat devices.
Daimler's diesel nightmare continues.
MERCEDESMercedes GLC C Class and Vito cars found to be with emissions defeat devices
The automaker says it is cooperating fully with the German Transport Ministry and KBA investigation; Daimler CEO Dieter Zetsche met with the German Transport Minister on June 11 to discuss the report. Last year, Mercedes-Benz retrofitted roughly 3 million cars with modified emissions controls to bring those cars into compliance with Euro 5 and Euro 6 regulations. Daimler hasn't contested the existence of the devices, but has argued that the devices may not be illegal.
It's now unclear how many models in the United Kingdom are impacted.
The recall was announced after meetings on Monday between Daimler executives and Germany's top regulator failed to resolve the issue, which related to unapproved software functions found in the carmaker's Euro 6 diesel engines, according to a report in Bloomberg. "Those functions are part of a complex emission control system created to ensure robust emission control in different driving conditions and over the lifetime of a vehicle".
That said, it has pledged to remove the software and to cooperate with authorities, the ministry said.
Evercore ISI analyst Arndt Ellinghorst predicted the costs for the required software update for Daimler would be less than 100 million euros.
'Overall, this outcome should de-risk the stock'.