Shares of Fiat Chrysler drop on potential sales ban

The Chrysler Jefferson North Assembly Plant is shown in Detroit, Michigan.
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The Chrysler Jefferson North Assembly Plant is shown in Detroit, Michigan.

Shares of Fiat Chrysler fell 5.1 percent Monday following reports from a German newspaper that the automaker could be banned from selling cars in Germany if evidence of disregarding emissions rules is found.

The German Federal Motor Transport Authority found that the carmaker may have manipulated emissions controls in some Fiat models, German newspaper Bild am Sonntag reported in its Sunday edition. Bild also reported that the KBA could threaten the company with a sales ban if the company disregarded emissions rules.

Fiat Chrysler declined to comment on the report.

Rival automaker Volkswagen admitted to using a device to cheat on emissions test in the U.S., sending the stock price down more than 17 percent since the scandal broke in September. CEO Martin Winterkorn stepped down as the company faced global investigations, as well as probes from the FTC and Justice Department.

Source: FactSet

Fiat Chrysler refused to meet with German regulators to discuss findings of an emission probe last week, according to Bild. The Italian-American automaker was asked to comment on findings that the cars are not "in conformity with consumption and emission rules", according to independent equity research firm AlphaValue, but declined on grounds that responsibility was with Italian regulators to test the vehicles.

"We regard Fiat's answer as a blow it its reputation in Germany (and perhaps beyond)," AlphaValue said in the note. "This 'non-response' can be regarded as an indication that some of its vehicles may also not be obeying European laws."

Fiat Chrysler dropped more than 5 percent in Milan, while shares in the U.S. trading at $6.68 Monday, down from their 52-week high of $10.89. The stock is down more than 27 percent year-to-date, and more than 36 percent year-over-year.