(MENAFN- AFP) Shares in French automaker Renault and other car companies skidded again Friday amid fears that an emissions scandal engulfing Volkswagen may be spreading sector-wide.
Renault stocks had slumped by more than 20 percent during Thursday's session after unions reported that anti-fraud investigators had raided several of the company's sites, possibly looking for emissions cheating devices on diesel engines, before closing around 10 percent lower.
In late morning Friday, Renault shares were down 2.8 percent at 75.61 euros on the Paris stock exchange.
"Everybody wants to know whether Renault is cheating," brokers Aurel BCG said.
"The stock exchange context and the painful memories of the VW scandal have prompted investors to massively sell the stock," they added, noting that French government ministers had been trying to "put out the fire".
The French government has a vested interest in Renault's fortunes, owning a 19.7 percent stake in the carmaker.
It raised its stake in the company last year, disturbing the fragile balance between Renault and its alliance partner Nissan, and angering Renault-Nissan boss Carlos Ghosn.
Nissan has been pressuring the French government to cut back its stake, but instead Paris only agreed to restrict any use of its newly-won voting rights in a deal that kept the peace between both sides.
French Economy Minister Emmanuel Macron has, however, said that the government was looking to sell five percent in the carmaker, but only if the price was right.
Since the raids on Renault outlets, the value of the state's stake in the company has been amputated by around half a billion euros, making an early stake sale unlikely.
"This is going to slow the process for the French government and it will make it more complicated to sell shares soon," said Bertrand Rakoto, an automotive industry analyst at Paris-based D3 Intelligence, quoted by the Bloomberg news agency.
Shares in other carmakers also dropped Friday.
Peugeot, France's biggest automaker ahead of Renault, fell 2 percent, Renault alliance partner Nissan's stock closed 1.9 percent lower in Tokyo, while BMW, Volkswagen and Daimler all dropped between one and two percent.
On Thursday, a government-appointed commission said that Renault's diesel cars failed pollution tests and investigators raided its facilities, raising fears the French carmaker could also be caught up in an emissions scandal.
Officials said however no pollution cheating software was found on Renault cars.
Germany's Volkswagen admitted in September having installed on 11 million diesel vehicles worldwide, sparking a scandal that could cost it tens of billions of dollars.
But with Renault having invested heavily in diesel engines, investors quickly dumped its shares.
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