By Max Bernhard 
 

Daimler AG (DAI.XE), the maker of Mercedes-Benz cars, said it is likely that German authorities investigating compliance of its diesel vehicles will allege that more of its cars are equipped with "impermissible" emissions-control devices, findings which could trigger mandatory recalls and registration stops.

Daimler said Thursday in its third-quarter report that "it is likely" that Germany's motor-transport authority KBA "will issue additional administrative orders holding that some other Mercedes-Benz diesel vehicles are also equipped with impermissible defeat devices." The company previously said such regulatory action "cannot be ruled out." The change in wording implies that Daimler now sees a higher risk of further administrative action.

The updated risk assessment comes after the car maker agreed to pay a nearly $1 billion emissions fine in Germany last month. Analysts at Evercore ISI have said further fines could be looming abroad. Meanwhile separate investigations in Germany are continuing.

Legal proceedings in relation to diesel emissions could result in additional costs, not yet covered by existing provisions. "Daimler is subject to governmental information requests, inquiries, investigations, administrative orders and proceedings as well as court proceedings in connection with diesel exhaust emissions. As legal proceedings are fraught with a large degree of uncertainty, it is possible that in the context of their final resolution some of the provisions we have recognized for them could prove to be insufficient," the company said.

Daimler said it plans to object to such administrative orders "in order to have the open legal issues resolved, if necessary by a court of law."

 

Write to Max Bernhard at max.bernhard@dowjones.com; @mxbernhard

 

(END) Dow Jones Newswires

October 24, 2019 08:09 ET (12:09 GMT)

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