BMW Fined $40 Million by NHTSA for Violating MVS Act

BMW Fined $40 Million by NHTSA for Violating MVS Act

BMW North America has recently been issued a $40 million fine by regulators at the National Highway Traffic Safety Administration (NHTSA) for “a series of violations of the Motor Vehicle Safety Act and NHTSA regulations.”

According to the announcement regarding this penalty, BMW will required to pay $10 million in cash to federal regulators ASAP and to spend at least an additional $10 million to get in compliance. The remaining $20 million is considered to be “deferred penalties that will come due” in the event of noncompliance or additional MVS Act violations.

This is reportedly the second civil penalty federal regulators have issued BMW since 2012.

Background on BMW’s Violations

BMW has become the target of enforcement action because, as regulators have pointed out, the automaker:

  • Misinformed regulators about vehicle safety issues affecting 2014 & 2015 Mini Coopers – In fact, BMW reported that, although 2014 & 2015 Mini 2-Door Hardtop Cooper vehicles failed a crash test, these vehicles would pass that test when the correct weight rating for the vehicles was applied. Regulators, however, found that this was not true when they retested these vehicles in July 2015 and they still failed crash testing despite the appropriate weight rating being used.
  • Failed to report safety issues in a timely manner – When BMW became aware of the safety issues with its Mini Cooper vehicles, it failed to report these issues to regulators within five days of discovering them, as is required by the Motor Vehicle Safety Act.
  • Failed to carry out remedies to address these issues – In October 2014, BMW agreed to conduct a recall, as well as a “voluntary service campaign,” to “correct the incorrect weight rating” with the affected Mini Coopers and to “add additional side-impact protection.” In July 2015, however, regulators discovered that BMW had taken no such actions.

Commenting on the penalty issued to BMW, U.S. Transportation Secretary Anthony Foxx has stated:

NHTSA has discovered multiple instances in which BMW failed its obligations to its customers, to the public and to safety… The Consent Order NHTSA has issued not only penalizes this misconduct, it requires BMW to take a series of steps to remedy the practices and procedures that led to these violations.

Now, in addition to paying the NHTSA fines, BMW must also:

  • Retain a consultant, who must be approved by the NHTSA, to develop best practices that will promote compliance with the MVS Act & NHTSA regulations moving forward
  • Develop a plan to prevent “new vehicles with unremedied safety defects” from being sold in the U.S.
  • Provide NHTSA with a monthly written report regarding ongoing efforts to get into compliance.

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