BMW is under investigation by the SEC about its sales reporting practices in the U.S.

BMW Group, which is in the midst of a heated sales race with Mercedes-Benz for the top spot in luxury sales in the U.S., is being investigated by the U.S. Securities and Exchange Commission, the company confirmed.

The inquiry is focused on the company’s sales practices, and the commission contacted BMW within the last month, said a person briefed on the matter but not authorized to speak publicly about details of the investigation, according to the New York Times.

The sales practice drawing scrutiny, the paper reported, is “car punching,” in which some loaner vehicles delivered to dealerships are reported as purchases to improve sales figures.

(BMW will hit 500K electrified vehicles sold mark this year)

A spokesman for the SEC said regulators could neither confirm nor deny an investigation. The inquiry was reported earlier by The Wall Street Journal.

Fiat Chrysler paid a fine of $40 million to the SEC in September to resolve an investigation into claims that it used a number of dubious practices to pump up its sales numbers, potentially misleading investors.

Regulators said FCA “inflated new vehicle sales results by paying dealers to

BMW has been accused of car punching as it competes with Mercedes-Benz for the luxury sales crown in the U.S.

report fake vehicle sales and maintaining a database of actual but unreported sales.”

(BMW offers insight on iX3, its first-ever long-range SUV)

Fiat Chrysler, in settling the matter, neither admitted nor denied wrongdoing but soon after the existence of SEC inquiry into its sales practices became a matter of public interest in 2016 Fiat Chrysler restated several years of sales records.

At the time, it was widely known in the auto industry that manufacturers would sometimes count loaner or demonstration cars as sold.

The controversy over sales totals also has led to a change in the sales reporting timetable. FCA, Ford and General Motors now all report quarterly sales numbers rather than monthly, which had been the norm in the industry since the early 1980s.

(All BMW models to be electric by 2030)

German, Japanese and South Korean carmakers, however, still report sales on a monthly basis.

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