Renault SA offices in France were searched by government fraud
investigators as part of a probe into vehicle emissions, raising the
specter of a VW-type scandal and sending the carmaker’s shares slumping the
most in almost seven years.
Agents from the Economy Ministry’s fraud officevisited Renault’s headquarters as well as sites in Guyancourt and Lardy
near Paris last week. The French carmaker is cooperating fully with the investigation, the
company said in an e-mailed statement Thursday, without providing details on
what may have been seized. French peer PSA Peugeot Citroen said it wasn’t
raided and no anomalies were found in its vehicles.
Automakers have been under increased scrutiny since September, when U.S.
regulators said Volkswagen AG cheated for years to make its diesel cars appear
cleaner than they are. The rigged engines were installed in 11 million vehicles
worldwide, sparking lawsuits by the U.S. Department of Justice and state
attorneys general as well as investigations in at least seven countries.
As part of the backlash, French authorities started a probe in September
into whether VW deceived customers about the emissions levels of its diesel
cars and promised toexpand the investigation to cover all carmakers. Separately, the country’s
environmental regulator began randomly testing vehicles to check differences
between lab results and real-world emissions.
Random Tests
Four Renault models had been tested by the end of last month, part of
the effort to screen as many as 100 cars -- including 25 from Renault, the
company said. No fraudulent systems have been found on Renault cars, and
shareholders and employees should “rest easy,” Environment Minister Segolene
Royal said at a news conference Thursday in Paris after Renault’s stock
slumped.
“That’s good news for Renault,” the company said in its statement,
seeking to quell concerns. Still, real emissions were found to be higher than
in test conditions for models from Renault and several non-French carmakers,
Royal said.
Authorities have visited several carmakers, and there’s no specific
stigma attached to Renault, Economy Minister Emmanuel Macron said at an event
in Berlin. The Renault case is in no way comparable to that of VW, said Macron,
who declined to name the other automakers that were visited. The French state
is the biggest shareholder in Renault, with a 19.7 percent stake.
Renault dropped 10 percent to close at 77.75 euros in Paris after
falling as much as 23 percent. Peugeot fell 5.1 percent. Other European
automakers declined as well. Fiat Chrysler Automobiles NV tumbled 7.9 percent
in Milan and Daimler AG slipped 3.6 percent in Frankfurt.
“If some other problems than Volkswagen occur, it’s not good news for
the whole automotive industry,” Gilles Le Borgne, Peugeot’s executive vice president for
research and development, said in a Bloomberg TV interview. “But as far as PSA
is concerned, we have no problem. We want that to be crystal clear.”
“With the dust starting to settle, this looks less impactful than the
initial market reaction had implied,” Dominic O’Brien, an Exane BNP Paribas
analyst, said in a note. “From what we can determine from the release, the raid
was an exercise to validate the findings of an independent technical
commission, which essentially cleared Renault of using an explicit defeat
device.” Still, there will be “a cloud hanging over the stock” until the
investigations are over, he said.
Unlike its larger German rival, Renault doesn’t sell cars in the U.S.,
where emissions standards are tougher. VW faces tens of billions of dollars in potential
penalties in the U.S.
Still, diesel engines are crucial for French automakers -- at the time the VW
scandal broke, the technology accounted for at least 60
percent of their
European sales.
The facility in Lardy is Renault’s main site in France for engine
development, said Florent Grimaldi, an official with the CGT union there. The
searches were earlier reported by Agence France-Presse.
“For several months, work has been ongoing on emission tests at the
Lardy site and the departments that were raided were those of certification and
adjustment of engine control systems,” Grimaldi said. “We have been asking for
more resources for months at Lardy to work on pollution control.”
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