US authorities investigate Fiat Chrysler over sales figures

Fiat Chrysler, the automaker under investigation by US authorities over its vehicle sales figures, said it will revise the way it reports those numbers beginning this month.

The company’s new method for the monthly US deliveries no longer includes a “reserve” number that historically has been included in the figure for fleet and other retail sales and also will account for “unwound” transactions in which a vehicle is returned, according to a statement.

Streak of gains

Under the revised method, Fiat Chrysler’s streak of monthly US sales gains would have ended in September 2013, the company said. It had reported increases for 75 consecutive months up to June.

Annual sales totals since 2011 under the new system are within about 0.7 per cent of the numbers previously reported, Fiat Chrysler said.

The carmaker said last week it was co-operating with investigations by the Securities and Exchange Commission and the US justice department on allegations that the company had inflated sales figures.

Those inquiries followed two Chicago-area civil lawsuits that challenged the company’s sales numbers, saying the carmaker had inflated its US car sales by paying dealers to report selling more vehicles than they had.

Revenue

“Fiat Chrysler has acknowledged that any inaccuracies in monthly sales reporting will not affect revenues, which is a plus,” said Michelle Krebs, senior analyst at Autotrader.

“Still, it is wise that Fiat Chrysler revises its monthly sales reporting to be as accurate as possible. Some have been quite surprised when Fiat Chrysler’s monthly sales reports have come in higher than anyone forecast, prompting questions about the accuracy.”

The carmaker said its revised reporting process would yield the “best available estimate of the number of FCA US vehicles sold to end users through the end of a particular month”.

The company’s monthly reporting will take into account three components: dealer-reported sales in the US, fleet sales delivered by FCA US, and other retail sales including those made by dealers in Puerto Rico.

Fiat Chrysler's US unit, like other carmakers, records revenue when a vehicle is shipped to dealers, rather than when the car or truck is sold to a customer. – (Bloomberg)