By on July 26, 2016

2016 Dodge Charger R/T, Image: Fiat Chrysler Automobiles

In response to media reports, a lawsuit, and federal investigations into potential sales figure tampering, Fiat Chrysler Automobiles is changing the way it records sales.

This means that the automaker’s much-touted 75-month sales streak is dead. FCA admits that under the new method, its year-over-year monthly sales gains ended in September 2013. Ad copy is likely being rewritten as you read this.

FCA is accused of inflating its monthly sales numbers by adding sales at the end of the month, then rolling them back at the beginning of the next. An Illinois dealer group alleges racketeering, with dealer payouts in exchange for false sales reports.

A report published by Automotive News yesterday claimed that the automaker uncovered the practice during a review. Internal sources claim the review turned up between 5,000 and 6,000 uncompleted sales that found their way onto sales tallies. U.S. sales chief Reid Bigland reportedly put a stop to the practice.

In a statement, FCA said the new methodology will be applied to July 2016 sales:

The objective of this new methodology is to provide in FCA US’s judgment the best available estimate of the number of FCA US vehicles sold to end users through the end of a particular month applying a consistent and transparent methodology. It continues to include some level of estimation in respect of, for example, unwound transactions that straddle a month end and fleet deliveries, which may be placed into service at various times after shipment and delivery. FCA US believes, however, that the consistency in application and transparency of this new methodology provides the most appropriate data for the limited uses to which the monthly vehicle unit sales data should be applied.

FCA took the methodology and applied it to data collected between January 1, 2011 to June 30, 2016. When the “unwound” sales were removed, the numbers differed from those it reported at the time.

“Annual sales volumes under the new methodology for each year … are within approximately 0.7% of the annual unit sales volumes previously reported,” the automaker stated.

Responding to claims of sales tampering, FCA claims it used the previous methodology for 30 years, which was similar to that used by other manufacturers. However, a problem exists with its New Vehicle Delivery Report (where retail sales data is collected from dealers) and unwound sales.

“It is admittedly also possible that a dealer may register the sale in an effort to meet a volume objective (without a specific customer supporting the transaction),” FCA stated. “There is, however, no obvious economic incentive for a dealer to do so, since FCA US’s policy is to reverse all incentives due or paid to a dealer that resulted from the unwound retail sales transaction.”

[Image: Fiat Chrysler Automobiles]

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24 Comments on “Not so Hot Anymore: Fiat Chrysler Changes Sales Reporting Method, Ends Winning Streak...”


  • avatar
    Kenmore

    MOAR INSTAGRAMMING!

    I can still detect some mid-tones.

  • avatar
    dukeisduke

    “FCA is accused of inflating its monthly sales numbers by adding sales at the end of the month, then rolling them back at the beginning of the next. An Illinois dealer group alleges racketeering, with dealer payouts in exchange for false sales reports.”

    RICO? Oh, this is gonna get interesting.

  • avatar
    sportyaccordy

    OK. Time to pull that lever back, and push the lever for “used 2016s with 32 miles on the odo” into overdrive!

  • avatar
    Pch101

    A 0.7% shortfall isn’t that much.

    • 0 avatar
      SCE to AUX

      Agreed.

      For last year’s 2.2 million FCA sales, this error amounts to 15k cars, or 2 days’ worth of sales over the entire year.

    • 0 avatar

      Yeah plus they have used it for 30 years. From what I understand almost every other maker uses the same system.

      • 0 avatar
        Polishdon

        If I am understanding this correctly, FCA reports are based on what the dealer reports. So unless there is proof that FCA ordered the dealers to fudge the numbers, it’s the dealer’s that are at fault. And based on the small amounts, it has to be a few dealers.

        And if other dealers use the same methods, I would be sure that other automakers do the exact same things to keep their vehicle sales up there ? (i.e. F-150, Camry, etc.)?

  • avatar
    FOG

    RICO? Probably sour grapes because that Illinois dealer didn’t reach one of their incentive levels after offering to “help” them reach their numbers.

  • avatar
    Corollaman

    FCA the official car company of the Clinton campaign.

  • avatar
    EBFlex

    Meh. This doesn’t affect the vehicles and they are stellar. Best power trains, best styling, best infotainment system and best prices.

    • 0 avatar
      Lorenzo

      Don’t forget best cash on the hood. Crisp, unwrinkled bills, shown and then whisked away, to be used as the down payment to qualify for those subprime loans.

      Nobody will go to jail, but there will be a fine that FCA can scarcely afford, and lots of bad PR. With a market cap of $8.6 billion, any price drop will put the market cap close to Jeep’s value alone.

      It would normally be easy to find a buyer for Jeep at that price, but as part of FCA, there’s about $40 billion of bonded debt attached. Not even the Chinese would bite. We’re now looking at Sergio’s greatest challenge.

      • 0 avatar
        EBFlex

        Doubtful. I didn’t get that much off my Jeep. But even at MSRP, the Grand Cherokee is by far the best value in the segment with the best power train, most capability and best quality.

        I could have optioned up a Ford Explorer to the same price easily and it wouldn’t have the quality, the power, the options or capability.

        This is being made into a mountain out of a mole hill. It’s a non story and won’t affect Chrysler in the least.

        • 0 avatar
          Zackman

          “best quality”? Huh? Sez who? Consumer Reports? Who?

          Sir, surely you jest. If only all you claim is true…

          • 0 avatar
            CoreyDL

            He declares “best styling” and “most capability” as though they’re things you can objectively quantify. Don’t think we need to take much of it too seriously.

    • 0 avatar
      Loser

      Come on Silvy, (EBFlex this week) if this was Ford you would be all over them.

  • avatar
    BuzzDog

    Sigh, another round of sales shenanigans on the part of an entity that produces Chryslers.

    Makes me wonder if there’s a sales bank of unsold vehicles piling up at the Michigan State Fairgrounds.

  • avatar
    wolfman3k5

    FCA still builds vehicles of questionable quality, never mind bellow average reliability. To say that many of their products are POS vehicles would be high praise… They are terrible, and the cost cutting is obvious to the point that many FCA built cars are at least as flimsy as Russian cars. Don’t believe me? Stop by any Dodge/Chrysler dealer and see for yourself. Better yet, rent a low mileage Chrysler Town&Country, or a 200, or even a Dart and just see for yourself how dreadful their products are. If FCA goes belly up it’s because of the craptastic products that they’re pedling.

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