Just when you thought Fiat Chrysler couldn’t get in any more trouble, the company is now facing allegations of fudging sales numbers.
This week, several FCA dealers in the Chicago area filed a civil racketeering lawsuit that accuses the automaker of incentivizing fraudulent sales reports, according to Automotive News. The suit alleges that the company offered dealers large amounts of money to “report unsold vehicles as sold.”
The lawsuit comes the same week as FCA CEO Sergio Marchionne touted the automaker’s monthly sales streak at the Detroit Auto Show. Automotive News notes that FCA has posted 69 consecutive monthly year-over-year gains after recovering from its U.S.-steered bankruptcy. That’s the longest current U.S. sales streak of any automaker.
The federal lawsuit was filed by two dealerships in the Napleton Automotive Group. It claims that FCA conspired with certain dealers to inflate the automaker’s monthly U.S. sales reports. A lawyer for the dealers alleges they were paid to report the false sales on the last day of the sales month and then “back out” or unwind the sales the following business day “before the factory warranty on the vehicles could be processed and start to run.”
It says FCA directly benefited from the practice “as it results in the inflation of the number of year-over-year sales which, in turn, create the appearance that FCA’s performance is better than, in reality, it actually is.”
FCA responded to the lawsuit with this statement:
“While the lawsuit has not yet been served on FCA US, the company believes that the claim is without merit and was filed by internal counsel to the dealer group as FCA US has concurrently been discussing with the dealer group the need to meet its obligations under some of its dealer agreements.
“The company is confident in the integrity of its business processes and dealer arrangements and intends to defend this action vigorously.”
FCA paid a record fine last year imposed by the National Highway Traffic Safety Administration for among others things, mishandling recalls and under-reporting deaths and injuries.