Marchionne with accounting and law degrees without question understands FCA’s troubles.
What started earlier this year as a spat between two dealerships in Illinois against FCA’s booking as sales what were vehicles that actually remained in dealerships as subsidized loaners or demonstration units has now turned into a regulatory and legal nightmare for the Italian automaker.
Even though the practice of booking sales when a vehicle ships is universally used by automakers in the U.S., and many companies pay dealerships to have demonstration or loaner cars on hand, the lawsuit (Napleton Automotive Sues FCA for False Sales Reporting) has prompted investigations from the Department of Justice and the Securities and Exchange Commission. Fiat of course trades on the NYSE. The outcomes of both matters potentially have broad implications for the sales reporting practices of automakers and how some vehicles are invoiced to dealerships.
FCA is terse in its lawyered-up statement, saying only “that it is cooperating with an SEC investigation into the reporting of vehicle unit sales to end customers in the U.S. 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. Inquiries into similar issues were recently made by the U.S. Department of Justice. FCA will cooperate fully with these investigations.”
FCA has no choice of course. Other automakers will be following this mess closely.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
