Renault's market value dips amid emissions probe

French carmaker Renault said fraud investigators had inspected three of its sites to look into vehicle emissions technology, news that wiped billions off its market value in an echo of the scandal engulfing German rival Volkswagen.

It said investigations to date had found “no evidence of a defeat device equipping Renault vehicles”, in a reference to a type of software programme Volkswagen was found to have used by US investigators to cheat emissions tests.

Renault shares fell as much as 22% after union officials first said the sites had been searched, prompting the firm to issue a statement confirming the inspections.

It said fraud investigators were looking at the way it uses exhaust emissions technology in an additional probe of parts and factories that follows an earlier probe by the French government.

Volkswagen last year admitted to using software to conceal the level of toxic emissions from some of its diesel vehicles in the US.

It faces billions of dollars in claims from owners of vehicles with similar software installed around the world.

French government finds Renault diesels also violate emissions regulationshttps://t.co/RjXNJeJ0vE pic.twitter.com/wsRYWlnCox

— Road & Track (@RoadandTrack) January 14, 2016

That has prompted probes across several countries into Volkswagen, as well as checks on other car manufacturers and a tightening of emissions regulations which some industry analysts think could hit the whole diesel vehicle industry — a key market for Renault.

The French company saw some €5bn wiped from its market capitalisation in the worst day since its shares were first listed in 1994, according to Reuters data.

“It’s hard to believe that VW would have been the only one to have rigged emissions testing,” said Clairinvest fund manager Ion-Marc Valahu, adding he had sold out of his shares in European carmakers.

The economy ministry called a meeting about the issue.

A government-mandated independent commission is conducting tests on 100 vehicles made by French carmakers, with 25 from Renault to be checked.

As of the end of December, four Renault vehicles out of a total of 11 had been tested and no signs of defeat technology had so far been discovered, the company said.

Nonetheless, fraud investigators “decided to conduct an additional investigation on parts and sites with the aim of definitively validating the initial analysis by the independent technical commission,” Renault said.

It added that its corporate headquarters and two technical sites had been targeted by the searches and that employees were cooperating.

The share plunge comes at a bad time for the French government’s plans to pare back its Renault stake from 19.7% to 15% under a deal that brought to an end a dispute over control with the company’s Japanese partner Nissan.

After shares of other carmakers began to be impacted, PSA Peugeot Citroen said its offices had not been searched and emissions tests had indicated no anomalies.