Daimler will recall 3 million diesel cars in Europe

Daimler said its management board had approved measures to cut diesel pollution including an investment of 220 million euros ($255 million) to update more than 3 million Mercedes-Benz diesel engine cars in Europe.

The steps are being taken -- amid scrutiny from German regulators -- to cut pollution from nitrogen oxide emissions, which have been blamed for causing respiratory disease, Daimler said.

“The public debate about diesel engines is creating uncertainty,” CEO Dieter Zetsche said in a statement on Tuesday. “We have therefore decided on additional measures to reassure drivers of diesel cars and to strengthen confidence in diesel technology.”

The plan extends a service action that began in March on compact cars and also included V-class vans.

Germany’s Transport Ministry declined immediately to comment on the recall.

"The company is investing about 220 million euros. The service actions involve no costs for the customers. The implementation of the measures will be starting in the next weeks," Daimler said in a statement on Tuesday.

Daimler executives last week were summoned to attend a meeting with government officials in Berlin to explain the automaker’s role in possible diesel-emissions cheating after two engines used in Mercedes vehicles drew increased scrutiny from prosecutors. The recall marks a change of approach after the company vowed to fight accusations of cheating by “ all legal means.”

“This is finally a proactive move to put something on the table and a solid attempt at getting out in front of the debate,” said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler. The cost of the recall is “extraordinarily low” and likely to rise, he said.

Mercedes is one of a number of auto manufacturers targeted in a technology scandal that’s enveloped the industry since Volkswagen AG admitted in September 2015 that it installed software to bypass pollution rules. Hundreds of police officers and prosecutors participated in searches at Daimler sites throughout Germany in May as part of a probe opened earlier this year.

The measures will see almost all of Daimler’s diesel cars in Europe with the Euro-5 and -6 emissions standards receive an upgrade.

Daimler further said it would roll out its new four-cylinder OM 654 diesel engine, first launched in the new E class in 2016, across its entire model portfolio.

Reuters and Bloomberg contributed to this report.