7/26/2016 – UPDATE #1:
Fiat Chrysler Automobiles (FCA) has stated in a press release that its sales reporting process does not affect the integrity of the company’s reported revenues for accounting purposes. The company has, however, decided to revise its methodology for reporting sales in order to provide “the best available estimate” of FCA vehicles sold in given month. Under this new methodology year-over-year monthly sales would have declined in three months since April of 2010… when the 75-month “sales streak” started. Those months are September 2013, August 2015, and May 2016. Starting with July 2016 sales reports, FCA will use the new reporting process.
7/25/2016 – ORIGINAL STORY:
Salesgate? No, need something more clever. Sales Inflate Gate? Doesn’t exactly roll off the tongue but it’ll do for now. I hereby dub the recent news of Fiat Chrysler Automobiles pumping up its vehicle deliveries figures as Sales Inflate Gate. It was reported by Automotive News that an internal investigation by FCA determined there were exaggerated sales. According to the story, the company hyped up sales of various FCA vehicles by a total of 5,000 to 6,000 vehicles. The cars in question were reported as sold by dealers but no such customers existed. This is potentially very bad news for FCA, as misreporting sales numbers – and thus, revenue – is considered fraud by the FBI and Securities and Exchange Commission.
Why exaggerate vehicle deliveries? Apparently, there was mounting pressure to maintain FCA’s 75-month year-over-year sales growth. There are currently two fraud investigations taking place against the company.
The second piece of FCA news today is the recalling of 323,361 vehicles in the U.S. The recall includes 2014 and 2015 Jeep Cherokees, the 2015 Chrysler 200, Ram ProMaster City, and Jeep Renegades. The affected vehicles have a wiring harness that may result in a fault code from an insufficient crimp. So far no injuries or deaths have been reported and the fix involves a new harness and software update. Owners will receive a notice to schedule the service.
We’ll keep you posted as more news develops about Sales Inflate Gate… and I’ll keep working on that name. Feel free to leave your ideas in the comments section below. Until then, check out one of FCA’s biggest debuts and the replacement for the Town & Country, the new Pacifica, in the video below.