BMW Delivers an Unwelcome American Holiday Gift

The auto industry’s yuletide gift to investors turns out to be another dent in its credibility. Family-controlled BMW AG has a reputation for being run conservatively and yet it’s become the subject of an investigation by the U.S. Securities and Exchange Commission into how it accounts for U.S. sales. It’s getting harder and harder to rely on numbers provided by the auto industry, whether we’re talking emissions figures or financial performance.

The alleged practices are unlikely to have yielded seismic benefits to the Germany luxury car giant. Dealers may have registered cars as sold when the vehicles were still on the forecourt, according to the Wall Street Journal. The possible scenario is that retailers sold cars to themselves, thereby inflating BMW’s monthly sales figures, then marketed them as nearly new at a discount. The vehicles would technically be second-hand but have limited mileage, having been used as demonstrators or loan cars for customers of the service department.