Regulators investigate Fiat Chrysler over manipulated sales reports

Fiat Chrysler Automobiles are being investigated by federal regulating authorities following accusations of inflated sales reports.

Pressure is mounting on the Italian-US car manufacturer as companies are being more heavily scrutinised in how they report their monthly sales.

Allegations were made against Fiat Chrysler earlier this year by a car dealer who claimed that it manipulated sales figures, and who also sued the company in January for rewarding stores who falsified sales reports.

Illinois dealer Edward Napleton alleges Fiat Chrysler’s recent sales growth was achieved by “strong arm” tactics to get dealers to falsify month reports, creating “the appearance that performance is better than, in reality, it actually is.”

The lawsuit brought by Napleton said that in June 2015, a district manager for Fiat Chrysler in Illinois asked one of its dealerships to falsely report 40 vehicles as sold in exchange for a $20,000 payment.

Now the US Justice Department and Securities Exchange Commission are following up the claims, having visited the homes of several regional officers of the carmaker.

Some manufacturers say dealers are allowed to purchase cars for their own use to meet month-end sales goals. Executives have defended the actions as commonplace in the industry and a way to supply dealers with extra cars for driver-testing and service-department loans.

Fiat Chrysler are on a hot streak of 75 consecutive months of sales increases, which has been helped by sales incentives and demand for its Jeep sport-utility vehicles.

The company said they are cooperating with the investigations in a statement.

“In its annual and quarterly financial statements, FCA records revenues based on shipments to dealers and customers and not on reported vehicle unit sales to end customers,” Fiat Chrysler said in the statement.