Fiat Chrysler dealer deals in spotlight

Automaker Fiat Chrysler Automobiles (FCA) is under investigation by the Securities and Exchange Commission (SEC) and the US Department of Justice (DoJ) over the way it reports sales figures and its approach to booking dealer activity.

The regulators are said to have raised concerns about the manufacturer’s approach to recording revenues based on shipments to dealers, rather than end sales to car buyers.

In January Napleton Automotive Group, a US Fiat Chrysler dealer, sued the company, accusing it of racketeering and fraud. The company claimed FCA encouraged dealers to lie about monthly car sales and said its boss had been offered $20,000 in exchange for falsely reporting the sales of 40 new vehicles.

Napleton also said FCA would regularly report sales at the end of the month but then cancel them the next day. FCA has described the claims as being without any merit and has pledged to defend itself. The case is ongoing.

However, FCA has acknowledged that it discovered 4,500 vehicles that dealers reported as sold even though they were only temporarily sold to subsidiaries or rental companies and then were later “unwound.” The company pointed out that these sales represent just 0.06% of the 7.7 million cars and trucks it has sold since 2011.

Neither the SEC or the DoJ have commented on their investigations, which are also ongoing.