Emissions-Testing Probe Prompts Raid of Renault Facilities 

Antifraud officials search several French car maker’s headquarters, engineering center

France’s antifraud authority has launched an emissions investigation into Renault SA and other car makers, French Economy Minister Emmanuel Macron said Thursday, deepening scrutiny of Europe’s car industry after Volkswagen AG  was caught cheating on emissions tests in the U.S.

Mr. Macron, who oversees the French competition and antifraud office known by its acronym DGCCRF, confirmed an industrywide investigation was under way after Renault said antifraud officials searched its headquarters and engineering center Jan. 7.

France’s transport and environment ministry also disclosed that Renault and other manufacturers failed special emissions tests introduced in the wake of the Volkswagen’s diesel-engine scandal.

Europe’s car industry is coming under pressure from regulators despite efforts by Volkswagen rivals to distance themselves from the German auto maker’s use of so-called defeat devices to dupe laboratory emissions tests. Environmental and consumer groups have warned that Europe’s lax testing standards are open to manipulation.

On Thursday, French Transport and Environment Minister Ségolène Royal said that road tests carried out by a special commission found two models from Volkswagen used software to deceive laboratory emissions tests. There was no evidence, Ms. Royal said, that other car makers used such software—a finding that Renault called “good news.”

In October, Ms. formed the commission to test 100 cars across the country’s auto industry, including 25 models by Renault. Some cars tested by the commission, including one Renault model, exceeded legal limits on nitrous oxide and carbon dioxide, Ms. Royal said. Twenty-two cars have been tested so far and more will be.

The French government, which is Renault’s biggest shareholder, faces a delicate act of balancing the need to enforce clean-air laws and safeguarding the future of its national auto industry.

Renault shares plunged on news of the probe, falling as much as 20% in morning trading. The stock recouped much of its earlier losses, ending down 10.2% to €77.75 ($84.41) on Thursday trading in Paris.

Mr. Macron said Renault’s situation was “by no means comparable” to Volkswagen, adding that he was confident in the French car maker.

Investors remain jittery since U.S. regulators revealed last September that Volkswagen diesel-powered cars had been rigged for yearsto cheat on emissions tests. The German company admitted it had installed software on some diesel-powered vehicles that could trick emissions tests, exposing it to billions of dollars of possible penalties.

PSA Peugeot Citroën, another large producer of diesel-engine vehicles, said it wasn’t subject to an investigation by the same antifraud authorities.

Renault said the antifraud searches took place at its headquarters, an engineering facility in Lardy, south of Paris, and a technical center in Guyancourt, west of the French capital.

Florent Grimaldi, a union official in Lardy, said inspectors spent a day examining managers’ computers. The engineering center is dedicated to engine development and houses some emissions testing activities, Mr. Grimaldi said.

“We were definitely surprised, there was no warning this was going to happen,” he said.

Neither Peugeot nor Renault sell their cars in the U.S., which has stricter emissions standards. France and other European countries have permitted car makers to submit so-called “golden vehicles” that emit fewer emissions than cars on the street for laboratory testing.

Auto makers, including Renault, are expected to appear before the special commission to explain why their cars failed the recent road tests and how they will improve their performance, Ms. Royal said.

Source: WSJ – Emissions-Testing Probe Prompts Raid of Renault Facilities

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