FCA Investigation Finds Inflated Sales/update page 2

The facts are that FCA was using a counting methodology that was different than the other OEMs that allowed them to increase reported deliveries. They counted the first time the VIN was reported delivered, and never took into account any transactions that occurred after the first transaction (a return and additional delivery).

They have now adopted the methodology of the others, that will count a negative one for the return of a vehicle, and a positive one for a delivery.

There statement that they would have reported more sales since 2011 is only true if they would have reported less sales prior to 2011. Changing a counting methodology only works for new vehicles, not for previous vehicles counted in a different manner.

First and the last time! If FCA is cooking the books then whoever is involved needs to be fired. But since nothing ever happens to the big boys and girls at the top (think GM and ignition switch here) it is all a big joke.

Now on to this.
From the DFP "The automaker stressed that its quarterly revenue figures have been accurately reported and unrelated to the way sales figures were being calculated and reported.

After reviewing its sales reporting practices, FCA said it realized that it was possible for dealers to report sales one month and then "unwind" some transactions recorded in its system and return vehicles to the dealer's unsold inventory."

"ronically, FCA now says its internal review discovered that it under-reported sales by nearly 19,000 cars and trucks since 2011. As a result of the changes, FCA's annual sales totals increased in three of the past six years by as many as 14,996 cars and trucks and decreased the other three years by as many as 8,991 vehicles, according to a sales chart the company released Tuesday."

"The sales increase streak is meaningless, but it makes a headline and it’s nice for the company to tout itself,” said Peter Henning, a Wayne State University law professor and a former SEC investigator"

So until the final report comes out the normal FCA haters are going to talk smack.

Don

Perrysburg Dodgeboy wrote:

mich800 wrote:

Right, fraud never hurts anyone but shareholders...:h

From innocent employees that lose their jobs to worst case scenarios like Enron.

Not that this is the case here but shareholders are not the only ones to feel the impact of things like this.

The shareholders won't get hurt as dealer sales have nothing to do with them. Factory sales to dealers not the end consumer are what they care about.

Don

Anyone who actually understands the business knows the "ONLY" thing that counts are retail and fleet deliveries. There is a limit to how many vehicles the dealer pipe-line will accept without sales. When that limit is met, either the manufacturer will need to increase incentives to move product or halt production. Either solution is expensive and ultimately profits are determined by the ability to sell into the retail market. Profits determine share price and is why people invest...not sales to the dealer body!

This is not the first time a manufacturer has been caught "padding" sales. Cadillac had almost an identical situation back in the early 2,000's and executives lost their jobs. These situations usually come from sales executives attempting to prove they are a hero and hoping to eventually "catch up". Those in the industry will tell you that most all manufacturers play games with sales figures at some point whether they are caught or not.

Travlingman wrote:
FCA said today their sales streak actually ended in 2013. They also said that since 2011 they under reported sales by 19,000 vehicles.:h Detroit Free Press

Kind of like when the IRS is investigating you for claiming your dog as a dependent and you respond by saying "but in 1984 I donated my underwear to Goodwill and didn't claim report it as a charitable deduction". Or as the Wizard said, "pay no attention to the man behind the curtain!"

Perrysburg Dodgeboy wrote:
First and the last time! If FCA is cooking the books then whoever is involved needs to be fired. But since nothing ever happens to the big boys and girls at the top (think GM and ignition switch here) it is all a big joke.

Now on to this.
From the DFP "The automaker stressed that its quarterly revenue figures have been accurately reported and unrelated to the way sales figures were being calculated and reported.

After reviewing its sales reporting practices, FCA said it realized that it was possible for dealers to report sales one month and then "unwind" some transactions recorded in its system and return vehicles to the dealer's unsold inventory."

"ronically, FCA now says its internal review discovered that it under-reported sales by nearly 19,000 cars and trucks since 2011. As a result of the changes, FCA's annual sales totals increased in three of the past six years by as many as 14,996 cars and trucks and decreased the other three years by as many as 8,991 vehicles, according to a sales chart the company released Tuesday."

"The sales increase streak is meaningless, but it makes a headline and it’s nice for the company to tout itself,” said Peter Henning, a Wayne State University law professor and a former SEC investigator"

So until the final report comes out the normal FCA haters are going to talk smack.

Don

Don't get upset Don!! If this was a post about Ford you would be all over it like the other FCA guys. If your going to put it out you should be able to take it.:B

This is really a non-story. Everyone needs to stop making ignorant claims about FCA since we don't know the full facts. I love seeing all the Ford and GM people on here claiming moral high ground.

RamGuy2500 wrote:
This is really a non-story. Everyone needs to stop making ignorant claims about FCA since we don't know the full facts. I love seeing all the Ford and GM people on here claiming moral high ground.

We do know many of the facts. Apparently FCA cared enough about the sales streak to ensure it continued. Below is a change they are making on how they report fleet sales.



Previously the company had a "reserve" stock of cars that had been shipped to big fleet buyers such as rental car companies but not recorded as sales. Managers had the ability to move those sales from one month to the next to make sure the company reported positive sales numbers. "Fleet sales will now be recorded as sales upon shipment by FCA US of the vehicle to the customer," the company statement said.

If FCA really meant to game the sales numbers, and accepted the risk of getting caught for only 6000 "additional" sales, then they all deserve to be fired for gross incompetence. Amateurs.

BMW just settled a lawsuit for having dealers buy 104,000 "demo" cars to pump up sales, and then selling them to customers as new without notifying the customer that the warranty began when the dealer bought the car, not when the customer bought the car. THAT'S how you game the system!

BMW Class Action

Perrysburg Dodgeboy wrote:
First and the last time!...

I count this as your fifth post on the subject of the accounting irregularities. Is math a problem at FCA?

Sorry that fruit was just hanging low and irresistible. :W

PS. my next truck will probably be a Ram, maybe I can buy a U.S. truck and pay with Canadian $ at 1:1? :B Don't fire those accountants yet.

Maybe a more honest company will buy out Dodge/Chrysler/Jeep, next time they go up for sale. Shouldn't be too far out, since they change owners fairly often.