BMW to pay $18 million U.S. fine to resolve inflated sales investigation

German automaker BMW AG and two U.S. subsidiaries agreed Thursday to pay an $18 million (£14.1 million) U.S. fine to resolve allegations that they revealed misleading information about the automaker’s retail sales volume in the United States while raising about $18 billion from investors in corporate bond offerings.

The U.S. Securities and Exchange Commission (SEC) stated that from 2015 to 2019, the automaker inflated reported U.S. retail sales, which helped BMW close the gap between actual retail sales volume and internal targets and “publicly maintain a leading retail sales position relative to other premium automotive companies”.

It added BMW of North America maintained a reserve of unreported retail automobile sales — referred to internally as the ‘bank’ — that the automaker used to meet internal monthly sales targets without regard to when the underlying sales occurred.

The SEC investigation started in 2019, BMW said.

“There is no allegation or finding in the Order that any BMW entity engaged in intentional misconduct,” BMW said, adding it “attaches great importance to the correctness of its sales figures and will continue to focus on thorough and consistent sales reporting”.

The SEC said the automaker has paid dealers to inaccurately designate vehicles as demonstrators or loaners so that the automaker would count them as having been sold to consumers when they had not been.

“BMW misled investors about its U.S. retail sales performance and customer demand for BMW vehicles in the U.S. market while raising capital in the U.S.,” said Stephanie Avakian, the SEC director of the division of enforcement.

In September 2019, Fiat Chrysler Automobiles and its U.S. unit agreed to pay $40 million for misleading investors about its monthly sales data to resolve a separate SEC investigation.