The emissions scandal isn’t going away any time soon, but this time it’s the turn of French manufacturer Renault which saw 20% wiped off its share price (€5bn) after police raided a number of its facilities.

Widely reported on Thursday (14 January), Renault confirmed the raids by fraud inspectors keen to check the manufacturer’s equipment.

Inevitably, media outlets were quick to question whether Renault was being investigated for its emissions claims with parallels being drawn with the Volkswagen scandal when the German manufacturer admitted to cheating the emissions tests in September.

Renault, though, released its own statement saying tests have shown no evidence of emission cheating devices and insisted investigators were looking at the way the manufacturer uses exhaust emissions technology.

Following the disclosures from the EPA, the US Environmental Protection Agency which discovered the software used by Volkswagen, an independent technical commission was set up by the French Government to verify that no devices were in use in French vehicle manufacturing.

As such, Renault tells us, the UTAC (French Homologation Authority) is currently testing 100 vehicles in circulation, including 25 Renaults which is also a direct reflection of the brand’s market share in France.  Eleven vehicles, four of which were Renault models, had undergone testing by the end of December 2015, and led ‘the French public authorities to initiate productive discussions with Renault’s engineering team’, reads the statement.

The news was first released by the CGT Renault union which said the engine control units were in the sights of investigators and hinted at a Volkswagen style investigation, according to media reports. The union are also reported to have told journalists computers of senior directors were seized.

Three facilities were raided last week – Renault’s headquarters, the Renault Technical Centre in Lardy and the Technocentre in Guyancourt, and disclosure of the action affected other car makers including fellow French manufacturer Peugeot whose share value dropped by 6.6%, the repercussions were also felt in neighbouring Germany with Daimler down 5.5%, BMW 4.5% and Volkswagen suffered again with a fall of 4.6%.

The Renault statement stresses the French Agency for Energy and Climate (DGEC), the main contact for the independent technical commission, ‘already considers that the on-going procedure would not reveal the presence of a defeat device on Renault’s vehicles.’ The statement adds, ‘this is good news for Renault.’

The brand was quick to assure the media, markets and motorists that the investigation forms part of its ‘improvement solutions for future and current Renault vehicles’.

However, Renault conceded that further investigations were carried out at the same time ‘in order to definitively confirm the first findings resulting from the analysis of the independent technical commission’.

In its statement, Renault said it was co-operating fully and underlined its commitment to the planet highlighting a 10% reduction in the carbon footprint of its vehicles in the past three years.

What the long term implications are remain unclear…it largely depends on the outcome of the investigation. But as the share price falls (not just for Renault but for other European manufacturers), it’s enough to make the market jittery again. The real test will be to see how consumers react. Volkswagen’s sales in the UK have suffered since the emissions scandal broke; its registrations tumbled 20% in November last year.

At the time, our specialist diesel clients told us business went eerily quiet although they have now recovered and sales of diesel vehicles both in the new and used car market remains strong. Figures from the Society of Motor Manufacturers and Traders (SMMT) for new registrations on December showed a 3% rise in new diesel vehicle registrations in December 2015.  And of course, 2015 was also a record year in the UK New Car Sales market.

The much longer term is way more difficult to predict, but there is one certainty and that is that the trust car buyers have in brands has been severely shaken and this latest investigation is likely to make consumers even more cautious despite Renault’s attempt at reassurance.