Federal investigators probing US sales reporting practices at Fiat Chrysler

19 Jul 2016


Federal investigators are looking into the US sales reporting practices of Fiat Chrysler Automobiles NV.

In a statement, yesterday, the automaker confirmed it was ''cooperating with a (US Securities and Exchange Commission) investigation into the reporting of vehicle unit sales to end customers in the US, '' it would fully cooperate with this and ''inquires into similar issues'' recently made by the US Department of Justice.

''FCA will cooperate fully with these investigations,'' the company said.

The statement further described how the company recorded its shipments: ''In its annual and quarterly financial statements, FCA records revenues based on shipments to dealers and customers and not on reported vehicle unit sales to end customers.''

The investigations apparently pertain to two Fiat Chrysler dealerships owned by Illinois-based Napleton Automotive Group. The dealerships had filed a civil racketeering suit against the automaker in January, alleging the company, in addition to other claims, offered dealers money to report unsold vehicles as sold.

In March, the complaint was amended to include additional Napleton-owned dealerships and to add other details, court records showed.

According to the amended federal lawsuit, the automaker's North American-based operation ''knowingly endorses and encourages the false reporting of motor vehicle sales by directly rewarding its district managers and business center directors with monetary and quarterly bonuses which are directly related to reported vehicle sales numbers.''

Fiat Chrysler said yesterday, it was cooperating with the investigations, adding that its annual and quarterly financial results were tied to shipments to dealers, not on sales to end customers. The probe had earlier been reported by Bloomberg News.

In the suit, Illinois dealer Edward Napleton alleged that the company's recent sales growth was achieved by "strong arm" tactics to get dealers to falsify month reports, creating "the appearance that [Fiat Chrysler's] performance is better than, in reality, it actually is."

Napleton alleged his company was offered $20,000 to falsely report sales of 40 Fiat Chrysler vehicles, which he rejected.

He told Fiat Chrysler's business centre workers to refrain from such practice.

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