Fiat Chrysler Automobiles said Tuesday it had revised more than five years of monthly USA vehicle sales figures to reflect a new reporting method, amid an investigation by federal authorities into claims of inflated sales figures.
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In January, a Fiat Chrysler dealers group sued the auto maker, accusing it of financially rewarding dealerships that falsely reported higher vehicle sales.
Last week, the auto maker pledged to cooperate with probes by the Securities and Exchange Commission and the Justice Department, which are reportedly examining whether the company violated securities laws.
FCA US said it has seriously considered simply ceasing to report the sales data on a monthly basis, and to rely only on published quarterly financial statements as a gauge of improvement or deterioration in USA activities.
But it said it was revising its sales reporting methods in a bid to be more transparent and consistent about its monthly results.
LouAnn Gosselin, a spokeswoman for Fiat Chrysler in Canada, said some of the new US sales reporting methods will “likely” be used when the company reports August’s Canadian sales in September. “We did not follow our competitor down that path”, Marchionne said.
– Dealers sign paperwork to sell a vehicle and then report it as a sale to Fiat Chrysler.
FCA, like other major US auto makers, books revenue when vehicles are sold wholesale to dealers, not when sales are made to retail customers.
One of the key changes is that the company will streamline the way its reports “fleet” sales each month to be at the time of delivery from FCA. But industry insiders say the numbers are often manipulated by both dealers and the companies.
The company’s new method for the monthly US deliveries no longer includes a “reserve” number that historically has been included in the figure for fleet and other retail sales and also will account for “unwound” transactions in which a vehicle is returned. Back in 2015 an internal investigation discovered the shenanigans – up to five or six thousand cars were reported as delivered though there was no buyer for them. Later they are sold as used cars. “There’s nothing new about this”, said Sandler, adding that all automakers do it.
The Napleton dealership group contends that an FCA executive offered Napleton $20,000 to falsely report sales of 40 new vehicles.
The lawsuit alleges that a competing dealership reported 85 false new vehicle sales and got tens of thousands of dollars in return.
FCA has said the lawsuit is without merit and pledged to defend itself.
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Fiat Chrysler shares on the New York Stock Exchange closed Tuesday up 1.74 percent at $7 per share. Fiat Chrysler¿s existing streak of 75 straight months of sales gains should have ended in 2013, according to revised sales figures released by the automaker Tuesday, July 26, 2016.
