- New method would have ended streak of gains in Sept. 2013
- Changes would alter annual totals since 2011 by about 0.7%
Fiat Chrysler Automobiles NV, the automaker under investigation by U.S. authorities over its vehicle sales figures, said it will revise the way it reports those numbers beginning this month.
The company’s new method for the monthly U.S. deliveries no longer includes a “reserve” number that historically has been included in the figure for fleet and other retail sales and also will account for “unwound” transactions in which a vehicle is returned, according to a statement Tuesday.
Under the revised method, Fiat Chrysler’s streak of monthly U.S. sales gains would have ended in September 2013, the company said. Through June, it had reported increases for 75 consecutive months. Annual sales totals since 2011 under the new system are within about 0.7 percent of the numbers previously reported, Fiat Chrysler said.
The automaker said last week that it was cooperating with investigations by the Securities and Exchange Commission and the Justice Department on allegations that Fiat Chrysler inflated sales figures. Those probes followed two Chicago-area civil lawsuits that challenged the company’s sales numbers, saying that the automaker inflated its U.S. car sales by paying dealers to report selling more vehicles than they actually did.
“Fiat Chrysler has acknowledged that any inaccuracies in monthly sales reporting will not affect revenues, which is a plus,” said Michelle Krebs, senior analyst at Autotrader. “Still, it is wise that Fiat Chrysler revises its monthly sales reporting to be as accurate as possible. Some have been quite surprised when Fiat Chrysler’s monthly sales reports have come in higher than anyone forecasted, prompting questions about the accuracy.”
The automaker said today that its revised reporting process will yield the “best available estimate of the number of FCA US vehicles sold to end users through the end of a particular month.” The company’s monthly reporting will take into account three components: dealer reported sales in the U.S., fleet sales delivered by FCA US, and other retail sales including those made by dealers in Puerto Rico.
Fiat Chrysler’s U.S. unit, like other automakers, records revenue when a vehicle is shipped to dealers, rather than when the car or truck is sold to a customer. As a result, “the process of reporting monthly retail unit sales has no impact on the revenue reported by FCA in its financial statements,” the company said in the statement.
FCA said that in evaluating practices for reporting sales volume, it didn’t find a global standard. Competitors in the U.S. have used “broadly similar approaches,” the company said.
Fiat Chrysler said it “seriously considered” no longer reporting monthly U.S. sales data and instead relying on quarterly financial statements. But the company said it decided the data is beneficial to market followers and that “to suspend monthly reporting would impact those constituencies and possibly may impair their perception, and in turn the public perception, of FCA US.”