BMW Group has categorically denied that it colluded with fellow German companies to cheat on emissions.

In a strongly worded statement, the Bavarian manufacturer of brands such as BMW, Mini and Rolls-Royce said: "The BMW Group categorically rejects accusations that Euro 6 diesel vehicles sold by the company do not provide adequate exhaust gas treatment due to AdBlue tanks that are too small."

It was referring to reports over the weekend that the European antitrust authorities were looking into allegations that Volkswagen, Daimler and BMW colluded illegally to hold down the prices of crucial technology, including emissions equipment.

The backlash could take on a new, far broader dimension if it turns out that the excess emissions were the result of illegal collusion by a de facto cartel. The probe could also lead to billions of euros in fines.

In a statement last Saturday, the European Commission partially confirmed a report in Germany's Der Spiegel magazine that said the authorities were investigating evidence that representatives of the carmakers met regularly to agree on technical specifications for everything from brakes to clutches to emissions systems. The collusion began in the mid-1990s and continued until recently, according to Der Spiegel, which said it had seen documents that were part of an antitrust probe.

The commission said that it and the German Cartel Office "have received information on this matter, which is currently being assessed by the commission". "It is premature at this stage to speculate further," the commission said.

The broad conspiracy described by Der Spiegel included dozens of working committees that discussed how to limit competition on new technologies, including emissions systems.

Though allegations of collusion are new, it was already clear that vehicles sold by almost all carmakers in Europe pollute more in everyday use than in tests. As a result, levels of harmful nitrogen oxides are higher in urban areas than they would be if carmakers were adhering to pollution standards.

Last week, Daimler said it would recall some three million Mercedes-Benz diesel cars to address concerns about their emissions systems amid scrutiny from the German government and prosecutors. Bloomberg, quoting a company statement, reported the recall will cost the Stuttgart-based carmaker about €220 million (S$348 million).

Daimler's regional office told The Straits Times that it had no plans to do a similar recall here.