Since the year started, Fiat Chrysler has faced a lawsuit alleging it padded monthly U.S. sales reports by paying dealerships to report unsold cars as sold. In a lengthy statement this afternoon, FCA said it has committed to “new methodology” in analyzing sales data and admitted its 71 consecutive months of year-over-year increases did not, in fact, occur.
While FCA did not admit wrongdoing in the face of multiple investigations?including the lawsuit brought by two Chicago-area FCA dealers, plus fraud probes by the Department of Justice and the Securities and Exchange Commission?it revealed it had overstated U.S. sales by hundreds of cars each month since the start of 2011 due to unsold cars reported as sold.
At issue is what FCA calls an “unwind,” in which a dealer reverses a sales transaction after reporting it to FCA as sold. This happens frequently enough each month to all automakers, typically the result of a customer’s failing to secure financing or canceling an order, insurance claims, or any number of other valid reasons. But some FCA dealers, the company has admitted, have registered sales during one month and then reversed them the next month without FCA ever recording the change. FCA says there were 4500 “unwound” cars in dealer stock as of June 30. Given FCA’s data, we can assume they’re referring to just this year alone, since new cars don’t sit on dealer lots for more than a few months at most. Whi...