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Daimler shares were down almost 7% at midday after the carmaker said it had begun an internal investigation into its diesel emissions testing.

The owner of the Mercedes-Benz brand said it was conducting the probe at the request of the US Justice Department.

"Daimler is co-operating fully with the authorities," the German company said.

Separately, on Friday, Daimler posted a 31% fall in first-quarter profits as costs of new car launches weighed on the bottom line.

News of Daimler's investigation comes after Volkswagen agreed a deal with the US over its emissions scandal, in which it will offer compensation and buy back some cars.

Last year, US regulators discovered that VW cars were fitted with software that could distort emissions tests.

And just this week Japan's Mitsubishi Motors admitted rigging data on some of its models' fuel efficiency, while France's Peugeot has been raided by anti-fraud officials as part of ongoing investigations on pollutants in the car industry. But Peugeot says the pollutant emissions are compliant.

Daimler said it would "investigate possible indications of irregularities and of course take all necessary action".

Six months ago the US Environmental Protection Agency said it would review diesel vehicle emissions in light of the VW revelations.

In addition, US owners of Daimler's Mercedes-Benz BlueTEC diesels filed a class-action lawsuit claiming the cars are programmed in a way that lets them emit illegal levels of emissions, similar to diesels made by fellow German carmaker Volkswagen.

Daimler says the lawsuit's claims are without merit and that the Justice Department investigation is unrelated.

Joe Rundle, head of trading at ETX Capital, said: "Daimler is the next in the firing line as it opens an investigation at the request of the DoJ - the fall in its share price today reflects investors' nervousness about a problem that could easily escalate, even if the company says the class actions against it are baseless."

The company also reported a 31% fall in net profit in the first quarter to €1.3bn ($1.5bn; £1.1bn) in a separate . Revenue rose 2% to €35bn on vehicle sales of 683,885, a 7% increase.

Higher costs outweighed record sales in China.

On the earnings conference call, chief finance officer Bodo Uebber refused to comment further on the emissions investigation.