UPDATE 2-BMW North America agrees to $3 mln safety fine

Fri Feb 10, 2012 6:34pm EST

* US NHTSA says BMW did not promptly report defects

* Investigation found a number of violations

By John Crawley

WASHINGTON, Feb 10 (Reuters) - BMW North America will pay a $3 million fine to settle U.S. government allegations that it failed to promptly notify auto regulators about safety defects and recalls.

The National Highway Traffic Safety Administration said on Friday that it found a number of disclosure violations related to 16 investigations of 2010 recalls affecting more than 338,000 passenger vehicles and motorcycles.

The biggest recall, accounting for nearly two thirds of the total number of vehicles cited by NHTSA, involved certain BMW 5 and 6 Series cars from 2004-10 and 7 Series models from 2002-08. A potential oil leak in the brake vacuum pump heightened crash risk, regulators said.

"NHTSA expects all manufacturers to address automotive safety issues quickly and in a forthright manner," NHTSA Administrator David Strickland said in a statement.

BMW could not immediately be reached for comment.

The BMW penalty was the largest since Toyota Motor Corp agreed to pay nearly $50 million in fines stemming from disclosure issues that included massive recalls in 2009 and 2010 for sudden acceleration.

Since Toyota, U.S. auto regulators have become more aggressive in launching safety investigations and have gotten tougher with automakers about their recall practices.

In many cases, NHTSA initiates defect investigations that sometimes lead to recalls based on consumer complaints or safety related incidents. In other cases, automakers find defects themselves or through other sources and take action without government involvement.

Regardless, U.S. law gives manufacturers five business days to notify NHTSA of any defects in cars, trucks or motorcycles sold in the United States.

NHTSA said BMW failed on multiple occasions to promptly report problems in certain motorcycle and vehicle models that led to recalls initiated by the company.

In documents released by NHTSA, investigators noted a "troubling trend" regarding BMW disclosure. They said the company provided little information initially about recalls and then dragged its feet when asked to follow up.

Missing or incomplete information sought by U.S. regulators included plans by the company for addressing defects and details about the number of vehicles potentially affected.

In addition to the pump problem in the 5, 6, and 7 series models, other cases involved insufficient windshield bonding in certain 2010 X5 and X6 sport activity vehicles. NHTSA also cited side lighting problems with certain 2010 X5 M SAVs and chain and brake problems in some motorcycles.

BMW North America and its parent, Bayerische Motoren Werke AG, agreed to address internal recall decision making to ensure that any future problems are reported to the U.S. government and consumers, NHTSA said.

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