FCA: 'Sales streak' actually ended in 2013
The company has downplayed the sales-reporting controversy, but promises to reform its methodology.
Fiat Chrysler Automobiles has issued a lengthy statement downplaying the sales-reporting controversy and promising to reform its methodology for counting deliveries going forward.
The company in March boasted of an long-running year-over-year sales "streak" of positive growth, dating back to April 2010. In reality, the streak appears to have ended in September 2013, according to a corrected count. Another decline was posted in August 2015.
"Recent press reports have raised questions about the manner in which FCA US reports vehicle unit sales data on a monthly basis," the company acknowledges. "These reports have mistakenly suggested that potential inaccuracies in the monthly data somehow impact the integrity of FCA's reported revenues in its financial statements."
The automaker places blame on its individual dealers for exaggerating sales and then 'unwinding' the transaction the following month. The company argues that there is "no obvious economic incentive for a dealer to do so," however, as any incentives are reversed once the sale is unwound.
"These unwinds may, and in fact do, occur for a number of reasons including: inability of the retail customer to finalize financing for the purchase or a change in customer preferences, among others," the statement adds. "It is admittedly also possible that a dealer may register the sale in an effort to meet a volume objective (without a specific customer supporting the transaction)."
The statement repeatedly denies any connection between monthly retail sales reporting and revenue disclosures, implying that FCA has not violated any securities regulations. It is unclear if Securities and Exchange Commission and Department of Justice investigators are also maintaining such a narrow focus, or if the sales tally -- used by some investors to gauge brand performance -- may be subject to broader regulation.