Shares of German auto maker BMW (BMW-DE) dropped sharply in midmorning trade Thursday as a German newspaper claimed its diesel engines were "significantly" exceeding regulatory limits.
Auto Bild, a publication owned by Axel Springer, said Thursday in an exclusive report that BMW engines were emitting nitrogen oxide levels that were 11 times more than the current limit set by the European Union.
Citing road tests by the International Council on Clean Transportation (ICCT), it said that a model of the BMW X3 was emitting more poisonous gases than the Volkswagen car that is currently at the center of the emissions scandal.
"All measured data suggest that this is not a VW-specific issue," Peter Mock, the Europe Managing Director at the ICCT, told the publication.
BMW shares were 5 percent lower by a round 10:30 a.m. London time after the report was published. This came as other European auto makers were enjoying a bout of buying after several sessions of declines. Volkswagen shares were trading higher by 5.4 percent on Thursday morning.
In a statement , BMW said the carmaker did not "manipulate or rig any emissions tests. We observe the legal requirements in each country and adheres to all local testing requirements. When it comes to our vehicles, there is no difference in the treatment of exhaust emissions whether they are on rollers (eg. test bench situation) or on the road."
"We are not familiar with the test mentioned by Auto Bild concerning the emissions of a BMW X3 during a road test. No specific details of the test have yet been provided and therefore we cannot explain these results."
The company added that the ICCT had confirmed that the BMW X5 and 13 other BMW vehicles tested complied with the legal NOx requirements.
On Sunday, Volkswagen (VOW3-DE) admitted that it had cheated on U.S. emissions tests and has since issued a profit warning and its CEO Martin Winterkorn has resigned.
The scandal has raised fears that it could be a industry-wide issue with several major companies having exposure to the same diesel technology.
JPMorgan auto analyst Jose Asumendi calculated Tuesday that globally VW had 25 percent of engines exposed to diesel technology. BMW and Daimler have 35 percent and 45 percent, he added, with Peugeot having 40 percent.
Mike van Dulken, head of research at Accendo Markets, said that reports of another major carmaker having potentially been 'at it' would hardly come as a surprise.
"It begs the question of how 'polluted' the industry will turn out to be," he said in a note on Thursday morning.
"Claimed MPG (miles per gallon) figures have been pie-in-the-sky for years and electric cars whilst 'clean' in the emissions sense remain suspiciously/prohibitively expensive and poor ranging."
