The SEC is Investigating BMW for This Reason

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German luxury vehicle maker BMW is being investigated by the Securities and Exchange Commission. The announcement was made by a company spokesperson but no additional comments were provided.

The Wall Street Journal first broke the news following a probe by the paper. The WSJ reported the investigation is regarding BMW’s sales practices, specifically whether the company is “punching” its sales.

Sales “punching” can be when a dealer, self-registers cars as loaners, and later sells them as used with little mileage on them. The dealers buy vehicles from their own inventory and use them as loaner vehicles.

It can assist dealers in hitting company targets or automakers in achieving sales titles.

It was in 2016 that former BMW of North America CEO Ludwig Willisch reportedly said sales punching isn’t an ideal practice, “but it happens,” according to Automotive News.

The SEC said that it “can neither confirm nor deny the existence or nonexistence of investigations.”