U.S. regulators investigating BMW after 'sales punching' report

Dec. 24 (UPI) -- German automaker BMW said Tuesday it has become the target of an investigation by the U.S. Securities and Exchange Commission, which has oversight on how carmakers report sales to investors.

The confirmation followed a Wall Street Journal report that said BMW was facing an SEC inquiry relating to its sales reporting practices. The company told CNBC it's been contacted by U.S. regulators, but did not elaborate.

The Wall Street Journal reported BMW was under scrutiny for "sales punching," a practice to inflate sales figures. Under such schemes, dealers register cars as "loaners" so the manufacturer can report them as a full retail sale, which often helps both parties reach goals. The figures also sometimes help promote the auto brand, which can claim a particular vehicle is the "best selling" product in a certain market.

Dealers can later sell the loaners as used vehicles -- though at lower prices while absorbing the carrying costs as inventory. Some dealers have criticized BMW for similar arrangements.

The investigation comes after Fiat Chrysler agreed in September to pay $40 million to settle similar charges. In that case, the SEC said the automaker inflated monthly sales by paying dealers to report phony deals.