Peugeot suspected of fraud over diesels: report

Investigators suspect French carmaker PSA intentionally built diesel cars that failed to meet pollution rules, the daily Le Monde reported Friday, but the company immediately denied it acted fraudulently.

Le Monde said French fraud investigators believe the firm had a "global strategy aimed at building fraudulent motors and then sell them," citing a report by the investigators it obtained.

The report by the DGCCRF anti-fraud agency was one of the documents that prompted French prosecutors to open in April a probe into the maker of Peugeot and Citroen cars. 

A PSA spokesman told AFP the firm "denies any fraudulent strategies and strongly reaffirms the appropriateness of its technology choices" to reduce pollution.

The auto industry has come under a cloud of suspicion since Volkswagen, Europe's biggest carmaker, admitted in September 2015 to having fitted 11 million cars with devices the reduced harmful nitrogen oxide (NOx) emissions during regulatory tests but spewed out pollution when driven on the road.

Fraud investigators have levelled similar allegations at PSA's French rival Renault, part government-owned and accused of cheating on pollution tests for diesel and petrol engines for over 25 years with the knowledge of top management. Renault has denied the claim.

The French are also looking into allegations surrounding Volkswagen and Fiat-Chrysler.

Le Monde said that the DGCCRF report identified 1.9 million diesel vehicles sold by PSA in France between September 2009 and September 2015 "with motors that function using fraudulent strategies".

The newspaper said PSA could face a fine of 5 billion euros ($6.0 billion).

PSA said in a statement it has not been contacted by the judicial authorities and is "outraged to learn that information has been provided to third parties" while it has not been granted access to the information submitted by investigators to the public prosecutor's office. 

The firm defended its strategy regarding engine settings, which it said favours low NOx emissions in cities while ensuring a better balance between NOx and carbon dioxide emissions on open roads.

It added its "vehicles have never been equipped with software or systems making it possible to detect compliance tests and to activate a pollutant treatment device that would be inactive during customer use".