Best stocks to invest in – Why Fiat Chrysler (FCAU) Close Down 5% on the Day

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Fiat Chrysler Automobiles NV (FCAU) closed on the day to a three-month low as its fight with Germany over vehicle emissions escalated after the country’s most-read newspaper, Bild am Sonntag, reported that German authorities found the company to have cheated on testing.

According to a Bloomberg report, the aforementioned German newspaper reported that the Germany’s Federal Motor Transport Authority concluded that the Italian-American carmaker allegedly used illegal software to manipulate emissions controls.

Fiat Chrysler dropped as much as 5.9%, hitting the lowest intraday price since February 26.


A dispute between German regulators and the Italian-American carmaker came about on May 19, when Fiat refused to meet with the German Transport Minister to discuss findings of an emissions probe, the Bloomberg article notes. Moreover, European Union statutes state that Italy is responsible for testing Fiat cars because the automaker’s regional operations are centered in the country.

“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,” wrote Arndt Ellinghorst, an analyst at Evercore ISI in London, per Bloomberg.

The German Transport Ministry has relayed their findings to their counterparts in Italy and the European Union.

This may very well be another Volkswagen (VLKAY) situation. The German automaker’s scandal with emissions tampering brought forth much criticism of the company. Back in Mach, Volkswagen was sued in Germany over the scandal, and then had to payout $18 billion for its cheating last month.

Fiat Chrysler Automobiles has a Zacks Rank #1 (Strong Buy) and if this issue continues to escalate, its ranking may very well drop.

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