Shares in Fiat Chrysler (FCAU) fell more than 5 percent on Monday after Germany’s Bild newspaper reported that the carmaker could be banned from selling cars in Germany if evidence was found that it disregarded emissions control regulations.
Germany began testing vehicles of several carmakers in the wake of the diesel emissions scandal that engulfed Volkswagen (VLKAY), Europe’s biggest manufacturer. That resulted last month in Berlin asking carmakers to ‘voluntarily’ recall 630,000 cars for upgrades.
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. (For comparison, Volkswagen’s defeat devices turned themselves off one second after the 23-minute test cycle in the U.S. – read Fortune‘s in-depth investigation of the affair here.)
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 4.4 percent at 6.035 euros by 0700 Eastern Time.
“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, while any action against Fiat would likely trigger some reaction in Italy, where VW is facing both civil lawsuits and a criminal investigation.
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 criticized 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.
