U.S. regulators probe Fiat Chrysler vehicle sales
U.S. regulators are investigating whether Fiat Chrysler Automobiles NV (FCHA.MI)(FCAU.N) had inflated vehicle sales figures, the company said Monday, following a lawsuit by Illinois dealers in January.
The U.S. Securities and Exchange Commission and the Department of Justice are probing the way the Italian-American automaker reports vehicle sales to individuals, rental fleets and other end users, the company said in a statement.
In the civil lawsuit, two Chicago-area dealerships of the Ed Napleton Automotive Group accused Fiat Chrysler officials of pressuring dealers to falsify sales reports.
The federal probe could raise questions about how U.S. automakers compensate dealers for achieving sales targets.
Fiat Chrysler said in Monday’s statement that annual and quarterly financial statements filed with regulators are based on shipments to dealers, and not on sales to end customers.
In its lawsuit, the Napleton dealership group cited factory-to-dealer payments based on hitting quotas for selling certain models, or achieving overall sales targets. The group said Fiat Chrysler officials solicited competing dealers to falsely report sales to receive tens of thousands of dollars in bonuses from the automaker.
In January, Fiat Chrysler said the claims were baseless and that its quarterly financial reports presented a true picture of vehicles built and shipped.
Automakers release monthly reports of sales by dealers, including to individuals and rental fleets, and cars titled to dealerships for use as loaners.
Some automakers use a dealer’s monthly sales as the basis for calculating sales bonuses and other payments to the retailer. A dealership that hits a sales target can make more profit on each vehicle sold than one that falls short.
Maserati North America Inc dealers in New York, New Jersey and California have also filed a similar lawsuit in New York against the company, which is owned by Fiat Chrysler.
Fiat Chrysler’s U.S.-traded shares edged down 2 cents to $6.73 on Monday. Its shares traded in Milan closed up 2 percent at 6.20 euros.
Source: Reuters
