Renault shares dive following police raids

Update, January 15: Renault's archrival PSA Peugeot Citroen has today issued a statement declaring it has been cleared of any wrong-doing by French testing laboratory UTAC. Furthermore, it has not been subject to a search by the General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF), unlike Renault.

The Renault statement in full is as follows:

GROUPE RENAULT STATEMENT

Following public disclosure by the EPA – US Environmental Protection Agency – of the existence of a Defeat Device software used by a leading car manufacturer, an independent technical commission was created by the French Government.

The purpose of this independent technical commission is to verify that French car manufacturers have not installed equivalent devices in their vehicles.

In this regard, the UTAC (French Homologation Authority mandated by the Ministry) is currently testing 100 vehicles in circulation, including 25 Renault vehicles reflecting Renault's market share in France. At the end of December 2015, 11 vehicles had already been tested, including 4 Renault vehicles enabling the French public authorities to initiate productive discussions with Renault's engineering team.

The French Agency for Energy and Climate (DGEC), which is, on behalf of the Ministry for Ecology, Sustainable Development and Energy, the main contact for the independent technical commission, already considers that the on-going procedure would not reveal the presence of a defeat device on Renault's vehicles.

This is good news for Renault.

The on-going tests open the way for improvement solutions for future and current Renault vehicles. Presented in its Renault Emissions Plan which is aimed at improving the energy performance of our vehicles.

At the same time, the DGCCRF decided to carry out additional on-site and material investigations, in order to definitively confirm the first findings resulting from the analysis of the independent technical commission.

The DGCCRF went to the Headquarters, the Renault Technical Centre in Lardy and the Technocentre in Guyancourt.

Renault's teams are fully cooperating with the independent technical commission and the additional investigations decided by the Ministry of Economy.

Following the success of the COP21, Renault intends to accelerate its investment towards industrial solutions aiming at protecting the planet.

The Renault Group is already in the top 3 (1st in 2013, 2nd in 2014) in the improvement programs of the carbon footprint. Over the last 3 years, the Renault Group has reduced by 10% the carbon footprint of its vehicles.

Police have raided Renault’s HQ and two technical centres in its bid to investigate 25 Renault models accused of cheating emission tests.

The raids, confirmed by Renault, took place last week after investigators made surprise visits to check equipment used at its factories.

Fearing a Volkswagen-scale emissions scandal, the French car-maker’s share price plunged 20 per cent before recovering to trade 10 per cent lower than before the news of the raids broke.

Stressing that no evidence of any ‘defeat devices’ fitted to any of its cars was found, Renault confirmed that several computers used by senior Renault employees were confiscated as part of the raids.

Renault also claimed it was fully co-operating with fraud investigators.

Issuing a statement late last night, the French car-maker said investigators “went to the headquarter, the Renault Technical Centre in Lardy and the Technocentre in Guyancourt” where the police “decided to carry out additional on-site and material investigations”.

During the raids, the investigators targeted those involved in the development of Engine Control Units (ECU) to look for similar trick software to fool emission tests.

News of the raids follows last month’s declaration by Renault that it would invest $75 million on developing cars with emissions in the real world that are in line with the official test conditions.

Renault has a technical partnership with Daimler in which it supplies small diesel engines for small Mercedes-Benz, like the A-Class.

Speaking to Reuters earlier today a spokesman for the German car-maker said: "We have no reason to budge from our previous statements. We do not use defeat devices... Renault has assured us that it also doesn’t”.