MW's share price plummeted this morning amid claims that one of its diesel vehicles exceeded the EU's emissions limit.
The German car giant's stock fell as much as 7.3 per cent this morning, although staged a slight recovery to a drop of around six per cent at pixel time.
The company was hit after reports surfaced that its X3 xDrive 20d model emitted 11-times the European air pollution limits during a road test.
The SUV was road-tested by the International Council on Clean Transportation, the same group who alerted U.S. regulators to the gap between Volkswagen's emissions in tests and on the road, Germany’s Autobild reported
But BMW has issued a statement denying any difference between emissions in a test environment and on the road.
"No specific details of the test have yet been provided and therefore we cannot explain these results," BMW said in a statement today. "We will contact the ICCT and ask for clarification of the test they carried out."
The International Council on Clean Transportation could not be reached.
The claim comes a day after Volkswagen's chief executive Martin Winterkorn resigned in the wake of a scandal in which the car company was found to have installed a "detect device" in millions of vehicles to help it cheat emissions tests.
The news surfaced on Friday afternoon, when US government department the Environment Protection Agency announced 480,000 cars would have to be recalled. Volkwagen has since admitted it could affect 11m cars.
Today Germany's transport ministry said Volkswagen admitted manipulation took place in Europe, according to Reuters.
Mike van Dulken, head of research at Accendo Markets, said: "While this adds to this week’s 'VWgate' revelation, confirmation of yet another major carmaker having potentially been ‘at it’ will hardly come as a surprise for such a highly competitive industry.
"As more details emerge about the extent to which VW, BMW and likely others may have gone to pull the wool over regulators’ and of course the public’s eyes, it begs the question of how ‘polluted’ the industry will turn out to be. Claimed MPG 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.
"On the flip-side, with Germany so important within the context of Eurozone growth, the car industry so important to Germany, and the car so important to the US consumer, how long might global regulators have been looking the other way? Is a rather expensive game finally up?"
More to follow...