Fiat Chrysler shares have crashed on fears the car maker is about to be sued in the US over its alleged use of “dieselgate”-style defeat devices.

Shares in the company, which also owns the Alfa Romeo, Dodge and Jeep marques, dropped 7pc in early trading following reports the US Justice Department is preparing a case against it that could leave it facing multi-billion dollar penalties.

It is reported that Fiat Chrysler Automobiles (FCA) fitted some of its diesel-powered cars with software that disables pollution control systems during normal driving but switches them on during tests so they are able to meet required emissions standards.