MILAN (Reuters) - Shares in Fiat Chrysler (FCHA.MI) fell more than 5 percent on Monday after Germany’s Bild newspaper reported that the carmaker could be prohibited from selling cars in Germany if evidence of disregard of emissions rules was found.
Germany began testing vehicles of several carmakers in the wake of the diesel emissions scandal that engulfed Volkswagen (VOWG_p.DE), Europe’s biggest manufacturer, putting further pressure on a sector only gradually recovering from a six-year slump in sales.
The Bild am Sonntag newspaper said on Sunday that several tests by the German motor transport authority KBA had found evidence that the exhaust treatment system in some of FCA’s models would switch itself off after 22 minutes. Emissions tests normally run for around 20 minutes, the newspaper added.
In a separate report on Saturday, Bild had cited German transport ministry sources as saying that the carmaker could, in a worst case scenario, be threatened with a sales ban in Germany if it keeps disregarding emissions rules.
An FCA spokesman reiterated that “all its vehicles are compliant with existing emissions rules”. The spokesman declined to comment further on specific details in Bild reports.
Shares in the company fell more than 5 percent to touch a low of 5.94 euros, but later recouped some of the losses and were down 3.5 percent at 6.085 euros by 0920 GMT.
“Whatever the ultimate outcome of the findings, we doubt FCA would be fully prohibited from selling cars in Germany, given that Volkswagen was allowed to continue selling cars even as defeat devices were found in some of its cars,” UBS analysts said in a report.
Germany is FCA’s second biggest market in Europe after Italy.
Engine management systems and software have come under increased scrutiny since the VW scandal broke last September.
Though no other carmaker has been found using the “defeat device” software employed by VW, regulators and environmental groups have criticised the wide use of engine management systems which switch off treatments for reducing emissions in order to improve performance and increase the interval between services.
Germany’s transport ministry confirmed it had sent emissions data for some FCA models to the Italian authorities and the European Commission for checks. The authorities have been asked to evaluate the data and take appropriate actions, it added.
The ministry said FCA declined to cooperate with the investigation after the carmaker did not attend a meeting with the German authorities scheduled for last week.
However, Italy’s Transport Minister Graziano Delrio said last week German authorities should address the issue by contacting Italian regulators and not the company directly.
The European Commission is making checks on the matter, a spokeswoman said. She added that the Commission had asked all member states to investigate for the possible presence of defeat devices and is examining the findings before making a comment on the test results.
Reporting by Agnieszka Flak and Danilo Masoni in Milan, Georgina Prodhan in Frankfurt and Alissa De Carbonnel in Brussels; Editing by Keith Weir