NHTSA Fines BMW $40 Million for Recall Violations

The National Highway Traffic Safety Administration (NHTSA) has hit BMW with a $40 million fine after failing to address crash-testing problems on its small Mini vehicles, the latest in a string of automotive companies to be penalized by U.S. regulators over safety concerns and other violations of federal mandates.

The fine is the second paid by BMW since 2012 when the NHTSA fined BMW $3 million in 2012 for similar problems. BMW admitted to violating U.S. regulations requiring prompt reporting of defects.

The penalties revealed Monday stem from the company’s failure to tell vehicle owners promptly of recalls and from its failure to fix a version of the Mini Cooper that failed a side-impact crash test. BMW makes the Mini brand.

“NHTSA has discovered multiple instances in which BMW failed its obligations to its customers, to the public and to safety,” U.S. Transportation Secretary Anthony Foxx said in a statement issued Monday. BMW’s $40 million penalty includes $10 million due in cash, a requirement that the company spend $10 million meeting performance obligations and $20 million in deferred penalties that come due if BMW fails to follow through.

In a statement, BMW said it is working to improve its processes and will work with NHTSA. It said it agreed to a consent order that includes an admission by the company’s North American unit that it “did not comply in a timely fashion” with various reporting requirements.

The settlement ends a NHTSA investigation into whether the company failed to issue a recall within five days of learning that its 2014 and 2015 Mini Cooper models failed to meet regulatory minimums for side-impact crash protection.

In addition to paying the civil penalties, BMW must:

  • Retain a NHTSA-approved independent safety consultant to help the company develop best practices for complying with the Motor Vehicle Safety Act and NHTSA regulations and submit those best practices to NHTSA.
  • Evaluate, under the independent consultant’s guidance, all safety or compliance-related issues under the company’s review and provide a monthly written report to NHTSA on those issues.
  • Launch a pilot program to determine whether the company can use data analytics capabilities to detect emerging safety-related defect trends.
  • Establish a plan to deter BMW dealers from selling new vehicles with unremedied safety defects, a requirement stemming from the fact that during NHTSA’s investigation, a NHTSA representative purchased a new vehicle with an open safety recall from a BMW dealer.