By on July 25, 2016

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Fiat Chrysler Automobiles stopped inflating monthly sales figures after uncovering the practice last year, according to sources within the automaker.

The two insiders told Automotive News that the practice, which involved artificially boosting sales numbers before rolling them back the following month, was discovered by an internal review in mid-2015. FCA sales chief Reid Bigland reportedly put a stop to the practice.

FCA is now under investigation by the U.S. Department of Justice and the Securities and Exchange Commission.

Earlier this year, an Illinois dealer group filed a racketeering lawsuit against the automaker. Napleton Automotive Group claims FCA provided cash to dealers who filed false sales reports at the end of the month to boost the automaker’s delivery numbers. Napleton claims that dealers canceled the sales at the beginning of the next month.

The company sources said between 5,000 and 6,000 falsified sales were found during the review. It seems that corporate boasting was at the heart of the alleged deception — the practice aimed to keep FCA’s month-over-month sales streak alive. (Take a closer look at recent monthly sales tallies here.)

A fairly shocking allegation from one of the sources — if true — is that the dealer complaints reached FCA CEO Sergio Marchionne before Bigland killed the practice.

Sales would be easy to inflate at FCA, given the automaker’s unique reporting practices.

In a statement issued last week, the automaker said, “In its annual and quarterly financial statements, FCA records revenues based on shipments to dealers and customers and not on reported vehicle unit sales to end customers.”

FCA claims a 75-month sales streak, with last year’s annual tally being its best in a decade.

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10 Comments on “Fiat Chrysler Knew About Inflated Sales Figures: Report...”


  • avatar

    The only logical solution is expurgation of the current CEO.

    Replace him with me.

    I won’t need to lie about sales because we’ll be building monsters that people actually want.

    The Purge: Age of HELLCAT

  • avatar

    For accounting purposes a manufacturer counts a sale when a unit is sold to a dealer and paid for. A dealer counts a sale when its sold to a customer/end user and paid for.

    A dealer reports a vehicle delivered to a manufacturer, the warranty starts, and it becomes part of the monthly sales count that is reported by various automotive publications as the monthly sales. The unit is not necessarily sold to a customer/end user and paid for.

    Attaching bonuses to monthly sales (vehicles reported sold to the manufacturer) is a practice used by every manufacturer, and dealer. It becomes part of the monthly “dynamic pricing” deployed by all manufacturers.

    How aggressive, and how much bonus money is attached to vehicles that are reported delivered in a month is the question.

    Dealers: I accounted and received money for xx units, and reported xx+5 to the manufacturer, of which 3 are demos and 2 are courtesy cars.

    Manufacturer: this dealer reported xx+5 units delivered in a month, they were all paid by the floor planning facility when they were shipped to the dealer.

  • avatar
    npaladin2000

    As long as they keep building Hellcats and Abarths, let ’em be.

  • avatar
    Steve Lynch

    The perfect storm that led to this investigation:

    A dealer who spends more time suing automakers and worrying about other dealers then he does taking care of his customers and employees.

    An automaker who does not know the proper way to fudge sales figures, like BMW does.

    An agency that does not understand the car business, hates car dealers and car companies and is looking for publicity.

    Your tax dollars in action!

  • avatar
    Big Al from Oz

    I would like to see two sets of numbers from the manufacturers.

    First, production numbers. Second, sales numbers. To me sales numbers must be when a contract has been signed and the vehicle is actually driven off the lot, not someone who could be interested, or in the case of FCA given a loophole to drum up dubious numbers.

    Ordering and selling are two different animals.

  • avatar
    davefonz164

    At the tree dealers I worked at, no names mentioned, this was a common practice by the sales manager. The risks were worth the month end bonuses and quarterly bonuses, we had so many fake sales, demos, loaners, managers with 3 cars under their names I couldn’t keep count.

    The problem is someone got caught or wasn’t receiving their bonuses so they decided to speak out.

    BMW notoriously dumps their cars at cost and would have 30-50 Demos on in inventory.

  • avatar
    Zackman

    From all the 200s I’ve seen lately, FCA must be giving those away!

    Sorry, BTSR, hellcats aren’t the answer – most would not want one – me, for sure. Most want something economical, reliable (FCA ain’t, and never will be), smooth riding and easy to live with on a daily basis. After all, what good is all that horsepower when you sit in traffic on your commute? That’s the life for the majority of us, and that gets expensive very quickly.

    In any case, the answer isn’t going to come from anything FCA throws out there.

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