FCA restates U.S. sales, says winning streak ended 3 years ago

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DETROIT — Fiat Chrysler is changing the way it reports monthly U.S. sales to make the process more transparent, and as a result of the change, said its 75-month sales streak actually ended at 40 months, in September 2013.

The revelation followed a report in Automobile News | tomobile.org Monday on an internal investigation conducted by FCA in 2015 that found the automaker had 5,000 to 6,000 reported sales which had later been unwound — meaning they were not completed.

FCA, in a statement, said the objective of the new sales reporting methodology “is to provide in FCA US’s judgment the best available estimate of the number of FCA US vehicles sold to end users through the end of a particular month applying a consistent and transparent methodology.”

The automaker said it went back and reviewed past monthly U.S. sales reports using the new methodology. It found a 3 percent monthly decline in September 2013, when it had previously reported a 1 percent increase. Likewise, in August 2015, its U.S. sales would have slipped 1 percent, instead of the 2 percent increase it reported. And as recently as May 2016, its U.S. sales would have dropped 7 percent instead of the 1 percent gain it reported.

FCA said that its “annual sales volumes under the new methodology for each year in the 2011-16 period are within approximately 0.7 percent of the annual unit sales volumes previously reported.”

FCA said its new methodology will report total monthly U.S. sales comprised of:

  • Dealer reported sales, which will now be reported net of all unwound transactions recorded to the end of that month;
  • Fleet sales delivered directly by FCA, and
  • Retail “other” sales, including sales by dealers in Puerto Rico.

FCA also said its fleet sales would be reported upon shipment of the vehicles to the customer or end user.

The automaker said it “seriously considered simply ceasing to report this sales data on a monthly basis, and to rely only on published quarterly financial statements as a gauge of improvement or deterioration in our U.S. activities.”

However, the company said it understands that monthly sales are used by “the automotive press in particular, to opine about the state of the industry and we accept that our decision to suspend monthly reporting would impact those constituencies and possibly may impair their perception, and in turn the public perception, of FCA US.”

FCA said the “complexity” of sales reporting is unique to the U.S., and said that a European-style reporting system relying on registration data “has never been thought to be feasible.

FCA confirmed July 18 that its sales reporting process was under investigation by the U.S. Securities and Exchange Commission and the U.S. Department of Justice after reports in Bloomberg News and Automobile News | tomobile.org. Federal investigators visited all nine of FCA’s regional business centers on July 11 and spoke with current and former employees as part of their investigation. It remains unknown whether the searches and interviews were conducted under a warrant.

FCA was sued earlier this year by two of its dealerships owned by the Napleton Automotive Group accusing the automaker of a civil racketeering violation for falsely reporting sales, among other allegations. FCA sought dismissal of the federal suit in March, calling the allegations “baseless” and a “smear campaign” conducted by disgruntled dealers.

Written by Auto News

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