Fiat Chrysler sales are revised
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Fiat Chrysler acknowledged the Justice Department and Securities and Exchange Commission were probing its numbers.
Fiat Chrysler has revised more than five years of US sales figures and says a much-touted streak of 75 months of gains should have ended in 2013.
The company, in a lengthy statement issued this week, said it would change the way it reported monthly sales retroactively to the start of 2011. The move comes as two US federal agencies investigate whether the company inflated sales by pressing dealers to buy more vehicles.
Fiat Chrysler acknowledged this month that the Justice Department and Securities and Exchange Commission are probing its sales numbers. The agencies wouldn’t comment. Higher monthly sales could influence the company’s stock price, although Fiat Chrysler said in the statement that its quarterly revenue figures would not change.
Shares of Fiat Chrysler rose US12¢ to $US7 after the statement was released.
A chart issued by the company shows that it had overstated sales for 30 months since January of 2011, while understating the numbers for 36 months. During three months — September of 2013, August of 2015 and May of 2016 — sales would have declined under the new reporting methods. That means the string of monthly year-over-year increases actually ended in September of 2013 at 40 months.
During the past 5 years, the company understated its sales by nearly 19,000 vehicles, Fiat Chrysler’s statement said.
The Italian-American carmaker with US operations based in Auburn Hills, Michigan, has reported 75 straight months of year-over-year sales increases since April of 2010, a lengthy string for any carmaker.
The federal probe began after a Chicago-area dealership group sued FCA in January, alleging that competing dealers received incentives to report false sales.
The dealership group contends that an FCA executive offered the group $20,000 to falsely report sales of 40 new vehicles. The lawsuit also alleges that the false sales give the appearance that FCA’s performance is better than it actually is.
The lawsuit alleges that a competing dealership reported 85 false new vehicle sales and got tens of thousands of dollars in return. It also says FCA offered to pay the $20,000 to the dealership, disguised as co-operative advertising support.
FCA has said the lawsuit is without merit and pledged to defend itself.