Say you’re a dealer with a backlog of slow-selling models. What’s the last thing you would want?
The correct answer would be a springtime deluge of more of the same, whether you asked for it or not. That’s what some angry retailers across the Atlantic are facing after Fiat Chrysler Automobiles dumped 6,000 anemic sellers into Italian dealer management systems at the end of February.
According to Automotive News Europe, the dealers claim the automaker invoiced them for vehicles they didn’t order — to the tune of roughly 6,000 units total. In this case, unpopular units. The compact Fiat Tipa hatch and Ducato van made up the bulk of the unwanted invoices.
Fearing a backlash from the automaker, the dealers haven’t revealed their identities.
“We were invoiced for a considerable number of Tipos that we did not order,” explained one dealer. “They also had the wrong specifications, making them harder to sell. We already had a surplus of Tipos.”
Another anonymous dealer explained it was invoiced for more than 5,000 Tipos at the end of February, despite having only sold 4,000 units in February. The approximately 90,000 euros’ worth of odd allocations came as FCA struggled to prevent a weak first quarter. Because each delivery counts as a sale, the automaker’s Q1 health would see a corresponding boost — on paper, at least.
Carlo Alberto Jura, chairman of the company’s Italian dealer body, has protested the move, explaining that some dealers were already trying to drain an eight- to nine-month supply of Tipo models. That’s well above the “healthy” two-month benchmark. To move the unwanted models, Jura wants manufacturer incentives from FCA. He also complained, in writing, that the invoicing violates the dealers’ franchise contracts.
Automotive News Europe has learned Fiat’s Italian sales director, Pietro Nardi, copped to the invoicing in a dealer letter, admitting that “in some cases the practice had occurred.”
News of the invoicing comes after FCA landed in boiling hot water in the U.S. last year. The automaker faced federal investigations over its practice of moving vehicles from a dealer’s inventory to its demo fleet, and reporting that transaction as a sale. The sales were then rolled back at the beginning of the next month.
As a result, the automaker was forced to alter years of U.S. sales figures.
[Image: Fiat Chrysler Automobiles]