Economy, Auto

Fiat Chrysler Caught Inflating US Sales

Fiat Chrysler Caught Inflating US SalesFiat Chrysler Caught Inflating US Sales

An internal review ordered in mid-2015 by top Fiat Chrysler executives uncovered thousands of vehicle sales reported by FCA brands for which there were no actual buyers, according to two company sources.

The insiders told Automotive News that following the inquiry, US sales head, Reid Bigland, put a stop to the practice, which had resulted in FCA US reporting more sales than it actually made.

The sources did not specify the precise period covered by the review but said it revealed that 5,000 to 6,000 vehicles had been reported as sold by dealers and then “unwound.”

They said the sales numbers were inflated in part under pressure to preserve FCA’s streak of US monthly year-over-year sales increases, which now stands at 75 months.

One source cited dealer complaints about the practice that reached CEO Sergio Marchionne before Bigland sought to end it. But he added that the overstating of sales has crept back into play this year, as competitive pressures on FCA’s field staff have increased.

The other company insider said the employee turnover rate among sales staff in the company’s nine business centers around the country is four times higher than in the rest of the company because of pressure applied from above to meet aggressive sales targets.

FCA has declined to comment.

The revelations come as investigators from the Securities and Exchange Commission and the Department of Justice look into FCA’s sales practices. One of the company sources said investigators visited all nine regional business centers beginning July 11 and spoke with current and former employees.

Investigators also visited FCA field employees and past employees at their homes, the source said.