MILAN -- Shares in Fiat Chrysler Automobiles fell more than 5 percent today after Germany's Bild newspaper reported that the carmaker could be prohibited from selling cars in Germany if evidence of disregard of emissions rules was found.
Germany began testing vehicles of several carmakers in the wake of the diesel emissions scandal that engulfed Volkswagen.
The Bild am Sonntag newspaper said on Sunday that several tests by the German motor transport authority KBA had found evidence that the exhaust treatment system in some of FCA's models would switch itself off after 22 minutes. Emissions tests normally run for around 20 minutes, the newspaper added.
In a separate report on Saturday, Bild had cited German transport ministry sources as saying that the carmaker could, in a worst case scenario, be threatened with a sales ban in Germany if it keeps disregarding emissions rules.
An FCA spokesman reiterated that "all its vehicles are compliant with existing emissions rules". The spokesman declined to comment further on specific details in Bild reports.
Shares in the company fell more than 5 percent to touch a low of 5.94 euros, but later recouped some of the losses and were down 3.5 percent at 6.085 euros by 0920 GMT.
Germany is FCA's second biggest market in Europe after Italy. Fiat brand sold 24,532 cars in Germany through April, up 2.9 percent on the year before. Its market share was 2.2. percent.
Fiat ran into criticism earlier this year after the German environmental lobby group DUH claimed that the Fiat 500X 2.0-liter diesel variant has NOx emissions far above legal norms.
The dispute came to the boil on Thursday when Fiat snubbed a meeting with German Transport Minister Alexander Dobrindt to discuss the emissions claims.
Italian Transport Minister Graziano Delrio backed Fiat, saying that the automaker's are all certified in Italy and Germany should raise any concerns it has with Italian regulators and not the company directly.
Under European Union rules, Italy is responsible for testing Fiat cars because the automaker’s regional operations are centered in the country. A type approval in one EU country is valid throughout the 28-nation bloc so EU rules would prevent Germany from blocking sales of Fiats in the country.
"Whatever the ultimate outcome of the findings, we doubt FCA would be fully prohibited from selling cars in Germany, given that Volkswagen was allowed to continue selling cars even as defeat devices were found in some of its cars," UBS analysts said in a report.
Arndt Ellinghorst, an analyst at Evercore ISI in London, wrote in a report to clients: "If the Italian authorities are content with Fiat’s vehicles then, unless the German authorities can demonstrate to the Italians that they are missing something in their interpretation, we don’t expect any repercussions for the carmaker."
Engine management systems and software have come under increased scrutiny since the VW scandal broke last September.
No other carmaker has been found using the "defeat device" software employed by VW but regulators and environmental groups have criticized the wide use of engine management systems which switch off treatments for reducing emissions in order to improve performance and increase the interval between services.
Germany's transport ministry confirmed it had sent emissions data for some Fiat models to the Italian authorities and the European Commission for checks. The authorities have been asked to evaluate the data and take appropriate actions, it added.
A European Commission spokeswoman said the Commission had asked all member states to investigate for the possible presence of defeat devices and is examining the findings before making a comment on the test results.
Green campaigners also claim the Zafira diesel minivan sold by General Motors' Opel division has excessive NOx emissions. Unlike Fiat, Opel attended a meeting last week with German government officials. Opel said its engine control systems comply with regulations. Concerns raised by politicians and green groups are based on "misleading oversimplifications and misinterpretations" of how emissions control systems work, it said.
The allegations against Fiat and Opel are about exhaust treatment systems being shut down under certain conditions, as opposed to the VW scandal which involves the rigging of exhaust emissions tests.
Bloomberg contributed to this report