Fiat shares tumble on emissions fears

The Milan stock exchange has wiped five per cent off Fiat Chrysler Automobiles shares on fears of repercussions from the car-maker’s spat with the German transport department (KBA).

The KBA allegedly threatened to ban FCA from selling cars in Germany as a “worst-case scenario” after it ignored demands to meet German emissions investigators last week, according to German newspaper Bild am Sonntag.

The Sunday paper’s article led to an attack on FCA shares on Monday morning, even though European Union laws have no provision for Germany to take any action to stop the sale of FCA cars.

The KBA investigating committee, set up in the wake of the Volkswagen Dieselgate emissions-cheating scandal, had demanded a face-to-face meeting with FCA over alleged 500X 2.0-litre diesel emissions irregularities.

FCA said the car complied with all EU emissions laws and went further, insisting that the KBA’s demand to meet its investigators did not comply with European Union laws.

Bild am Sonntag declared that the KBA had evidence of FCA models switching off their peak emissions-cleaning equipment after 22 minutes and alleged the timing was designed to circumvent standard emissions tests, which usually last around 20 minutes.

But FCA’s move to ignore demands for a meeting last Thursday had the backing of Italy’s own transport minister, Graziano Delrio, who said that EU laws required the KBA should seek any clarification from his department, not FCA.

EU rules say that the country a car company is based in is responsible for validating any new cars and certifying them, and that type approval is then valid across the 28-member bloc, which would make a German ban almost impossible to enforce.

Any ban in Germany would be a blow to FCA. It has sold 24,532 cars there so far this year, making Germany its second biggest market in Europe, after Italy, and it holds 2.2 percent of the car market.

FCA's shares fell to a low of €5.94 early on Monday morning before bouncing back to €6.085.