BMW slapped with RM172 million fine for MINI recall

BMW was penalised US$40 million (RM172 million) and required to comply with performance requirements imposed by the US National Highway Traffic Safety Administration (NHTSA) in a consent order. The consent order – a voluntary agreement between both parties – was imposed on BMW for failing to issue a timely recall for 2014 and 2015 MINI 3 Door models that did not comply with side-impact crash protection standards.

“NHTSA has discovered multiple instances in which BMW failed its obligations to its customers, to the public and to safety,” said US Transportation Secretary Anthony Foxx “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.”

The order brings to a close an NHTSA investigation into whether BMW issued a recall within five days of learning the MINI had failed in testing. During testing in October 2014, a MINI Cooper 3 Door failed a crash test – Munich contended that the vehicle was listed with an incorrect weight and would pass the test if conducted at the proper weight rating.

At the time, BMW agreed with the NHTSA to conduct a recall to correct the incorrect weight rating on the MINI’s Tire Information Placard and to conduct a voluntary service campaign – not quite a recall – to fit additional side-impact protection.

The agency conducted a second crash test in July 2015 on another MINI 3 Door at the corrected weight rating and with additional side-impact protection, again resulting in failure – it was then that the NHTSA realised that BMW had not conducted the service campaign it originally promised.

Following an investigation and issuance of the order, BMW had to acknowledge it failed to timely recall non-compliant vehicles. It also had to concede additional violations the NHTSA has discovered, including failing to notify owners and dealers of recalls in a timely manner as well as providing required quarterly recall completion reports on time for multiple recalls since BMW’s previous consent order in 2012.

“The requirement to launch recalls and inform consumers in a timely fashion when a safety defect or noncompliance is discovered is fundamental to our system for protecting the traveling public. This is a must-do,” said NHTSA Administrator Mark Rosekind. “For the second time in three years, BMW has been penalized for failing to meet that obligation. The company must take this opportunity to reform its procedures and its culture to put safety where it belongs: at the top of its priority list.”

The order requires BMW to pay US$10 million (RM43 million) in cash and spend another US$10 million (RM43 million) to meet performance requirements; it would then have to trump up US$20 million (RM86 million) in deferred penalties should the order not be complied with, or if future safety violations are discovered. Additionally, BMW has to appoint an NHTSA-approved independent safety consultant to develop best practices to comply with the US Motor Vehicle Safety Act and submit them to the NHTSA.

The company is also required to evaluate all safety or compliance issues under its review (handed to the agency under a monthly written report), kick off a pilot program determining if BMW can detect safety-related defect trends through data analytics, and prevent BMW dealers from selling new vehicles with unremedied safety defects. The last bit stemmed from the fact that an NHTSA representative bought a new car with an open safety recall from a dealer.

Looking to sell your car? Sell it with Carro.