Fiat Chrysler Dealers Cry Foul Over Inventory Glut
Certain Fiat Chrysler dealers aren’t happy with the inventory buildup that took place over the summer, claiming the automaker is headed back to the bad old days with the creation of a sales bank.
FCA, which just sealed a merger agreement with France’s Groupe PSA, claims its inventory is under control, touting a significant reduction in unsold vehicles during the third quarter.
According to four dealers who spoke to Bloomberg, the automaker has created a sales bank, placing pressure on dealers by saddling them with unwanted stock. The company’s unordered vehicles once numbered 40,000, showing a clear disconnect between factory output and actual sales.
The dealers didn’t make a connection between the merger deal and the growing inventory, but Bloomberg did. Past bouts of financial trouble and associated merger-seeking saw the company create sales banks. In its defence, FCA claimed a new predictive analytics system put in place earlier this year is helping the company pare down its inventory and better align supply and demand. No sales bank here.
“We’re producing pre-specificationed vehicles against predicted demand so the right vehicles are available when dealers need them,” said Niel Golightly, Fiat Chrysler’s global chief communications officer.
Bloated inventories can be seen in the average number of days a brand’s vehicles loiter on lots. After rising significantly in the early summer, data from Edmunds shows fewer days’ worth of stock in recent months. At the beginning of October, all FCA brands declined in this measure — even Fiat and Alfa Romeo. The Dodge brand boasted 65 days’ worth of vehicles, which is below the industry average of 76. Jeep was second-best in this regard at 85. Still, FCA vehicles spent an average of 101 days waiting for a buyer during the third quarter.
According to FCA North American Chief Operating Officer Mark Stewart, the new system lowered inventory by 120,000 vehicles during Q3 2019. The dealers that spoke to Bloomberg complained of pressure to take on vehicles they didn’t want, claiming the automaker didn’t provide the incentives necessary to move old metal.
FCA’s incentive spend per vehicle last month was an 11-percent increase from the same period a year earlier. Third-quarter sales were essentially flat, which is a better result than many of the company’s rivals, though year-to-date volume is down 1 percent.
[Image: Fiat Chrysler Automobiles]
Join the conversation
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- ToolGuy CXXVIII comments?!?
- ToolGuy I did truck things with my truck this past week, twenty-odd miles from home (farther than usual). Recall that the interior bed space of my (modified) truck is 98" x 74". On the ride home yesterday the bed carried a 20 foot extension ladder (10 feet long, flagged 14 inches past the rear bumper), two other ladders, a smallish air compressor, a largish shop vac, three large bins, some materials, some scrap, and a slew of tool cases/bags. It was pretty full, is what I'm saying.The range of the Cybertruck would have been just fine. Nothing I carried had any substantial weight to it, in truck terms. The frunk would have been extremely useful (lock the tool cases there, out of the way of the Bed Stuff, away from prying eyes and grasping fingers -- you say I can charge my cordless tools there? bonus). Stainless steel plus no paint is a plus.Apparently the Cybertruck bed will be 78" long (but over 96" with the tailgate folded down) and 60-65" wide. And then Tesla promises "100 cubic feet of exterior, lockable storage — including the under-bed, frunk and sail pillars." Underbed storage requires the bed to be clear of other stuff, but bottom line everything would have fit, especially when we consider the second row of seats (tools and some materials out of the weather).Some days I was hauling mostly air on one leg of the trip. There were several store runs involved, some for 8-foot stock. One day I bummed a ride in a Roush Mustang. Three separate times other drivers tried to run into my truck (stainless steel panels, yes please). The fuel savings would be large enough for me to notice and to care.TL;DR: This truck would work for me, as a truck. Sample size = 1.
- Art Vandelay Dodge should bring this back. They could sell it as the classic classic classic model
- Surferjoe Still have a 2013 RDX, naturally aspirated V6, just can't get behind a 4 banger turbo.Also gloriously absent, ESS, lane departure warnings, etc.
- ToolGuy Is it a genuine Top Hand? Oh, I forgot, I don't care. 🙂
"Who stole the cookies from the cookie jar? Reid stole the cookies from the cookie jar Who me? Yes you Couldn't be Then who?"
Didn't Chrysler learn from the late 1970s pre-Iacocca era when they had a sales bank, and built thousands of unsold, sloppily-built cars to fill Detroit parking lots? Oh, wait, this isn't Chrysler anymore, it's FCA.