FCA Accused Of Inflating US Sales Figures

Fiat Chrysler logo (Credit: FCA)

In case you didn’t hear, Fiat Chrysler sold a lot of cars during 2015, but not everyone’s happy. In a nice little twist, Automotive News is reporting that two dealerships in the Chicago suburbs have actually filed a civil racketeering suit against the automaker. They claim that FCA actually offered wads of cash to dealers as a way to incentivize them to report that vehicles which hadn’t been sold yet were indeed delivered to customers.

Supposedly the deal was that the unsold vehicles were recorded as being sold at the end of each month. Then on the first day of the following month, everything would be undone so the factory warranties wouldn’t be affected.

The two dealerships are alleging that FCA threw around tens of thousands of dollars to dealers for helping out with the sales inflation scheme.

This casts a shadow on the 69 months in a row that FCA has reported year-over-year sales increases. That’s more than GM or Ford, which gives Fiat Chrysler some bragging rights it uses all the time. It also caused FCA’s stocks to drop in value.

Fiat Chrysler isn’t amused by the allegations, so it issued an angry press release to clear things up. The company thinks that the suit is fueled by the two dealerships’ inability to satisfy their dealer agreements. It claims that no evidence has been provided. In the press release, FCA also says that it’s “unfortunate and disappointing” that some well-respected media outlets have played into the hands of the two dealerships without vetting the facts of the case.

The really interesting part about this whole FCA scandal is that experts are wondering if other automakers are also paying dealerships to inflate sales numbers. A senior analyst at Wells Fargo Securities told Automotive News he half suspects that other automakers are doing the same thing to one extent or another. If that’s true, it means the big sales figures automakers have been bragging about could be a house of cards. Some analysts claim there’s an automotive market bubble that’s about to pop, and the fallout won’t be pretty.