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BMW faces US investigation into sales figures

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Via Financial Times

BMW is being investigated by the US Securities and Exchange Commission over its sales reporting practices, adding to a list of legal headaches faced by the Munich-based company.

A spokesman for the German carmaker confirmed that the company had been contacted by the SEC, and said that it was “co-operating fully with their investigation”.

The Wall Street Journal, which first reported the SEC’s move, said the regulator was investigating a practice known as “punching”. A well-known method of boosting sales statistics, it involves dealerships buying cars ostensibly for use as temporary replacements for customers whose vehicles are being repaired, only to sell them on soon after.

In 2016, Automotive News reported that Ludwig Willisch, BMW’s former North American chief executive, acknowledged that “punching” occurred in the industry, while conceding “there was a lot of pressure” within the carmaker’s ranks to rack up sales numbers.

BMW declined to say what the SEC was investigating.

The premium car brand would not be the first manufacturer to be targeted by the US regulator over its sales reporting methods. 

In September, the SEC fined Italian-American group Fiat Chrysler Automobiles $40m for misleading investors about the monthly figures for vehicles sold to customers in the US.

The regulator alleged that for four years up to 2016, FCA falsely boasted of “uninterrupted monthly year-over-year sales growth” in press releases, when in fact sales had dipped in September 2013.

News of the regulator’s interest in BMW will add to the headaches for Oliver Zipse, its chief executive.

In November, BMW reiterated that it was “more likely than not” that the European Commission would issue a significant fine over allegations that “manufacturers colluded to avoid competition in developing systems to clean the emissions of petrol and diesel passenger cars”. BMW has vowed to strongly contest those charges.

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Weeks later, Germany’s cartel authority fined BMW, along with rivals Volkswagen and Daimler, for anti-competitive practices in relation to the purchasing of steel products. BMW agreed to pay a penalty of about €28m.

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