Reports have now surfaced that Fiat Chrysler Automobiles NV (NYSE:FCAU) FCA had inflated their sales figures in the United States. This is after an internal review that was started in 2015. One of the contributing factors that led to the inflation of figures is the pressure to maintain a year over year monthly sales.
Inflation by 6000 cars
According to the report the time was not specified but it involved sales inflation by 5000 to 6000 cars. The inflation of sales came to an end under the head of Fiat Chrysler’s sales in the United States, Reid Bigland. This is after the internal probe was ended.
The staff turnover rate at FCA in nine business centers was four times higher out of the pressure to have results. This pressure was mounted on them by executives. However the report does not contain the names of the executives.
After the internal probe, there are also other investigations being carried out by the Securities Exchange Commission and the FBI. A lawsuit in January is what instigated the investigations whereby it was revealed that officials from Fiat Chrysler were putting pressure on dealers to falsify their sales reports.
Paid to falsify sales reports at end month
The lawsuit was made early this year by two auto dealers who alleged that Fiat was offering them a lot of money to inflate sales records. This was by reporting unsold vehicles as sold. According to the suit which was file by the assistant general counsel for dealerships, Kevin Hyde, falsified sales reports were reported on the last day of a month it was then backed out the next day just to avoid the warranty period of the vehicle being processed. This is what dealers were paid to do.
Fiat in response to the lawsuit said that they were confident about the integrity of how they carry out business and dealer arrangements and that they intended to defend their position vigorously.