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Dealers: FCA bribed for fake sales

Discussion in 'Car Dealer Hangout' started by Dave Z, Jan 14, 2016.

  1. Dave Z

    Dave Z It's me, Dave
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    Larry Vellequette reported last night in Automotive News that two dealerships are suing FCA, claiming that the company tried to bribe them to report cars as sold just before the end of the month, then back them out of the system a day or two later.

    [​IMG]
    This is not one of the dealers involved.

    According to the lawsuit, dealership managers were rewarded for hitting sales targets even when the company knew they had not really done so; it claimed that one FCA manager offered a dealership owner $20,000 to report 40 cars as sold, then take them back. According to the owner, FCA had already successfully gotten a different dealer employee to inflate the report by 16 sales.

    If true, some sales may be counted twice in sales reports, since sales figures in company spreadsheets do not change from year to year. If is also possible that once a particular VIN is listed as sold that it is never again listed as a sale for the company, even if it is backed out of the system and marked as new again.

    [​IMG]

    The main target of the suit was the minimum sales responsibility (MSR) figure, which the dealership owners said was used to intimidate dealers and “cover up … multi-tier pricing.” The company’s “Volume Growth Program” currently gives dealers no incentive unless they hit at least 90% of their goal, and originally had an all-or-none payoff. According to the plaintiffs, dealers who conspire with the company join in a new pricing tier, by gaining added incentive money.

    BMW and Mercedes have, in recent years, been accused of having dealers sell new cars to themselves to win their sales race; these cars were later sold as “used.”

    Automotive News has posted the full text of the lawsuit.

    Read the whole post here.
     
    #1 Dave Z, Jan 14, 2016
    Last edited: Jan 14, 2016
  2. ImperialCrown

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    "More is better".
    Sadly, it isn't just the car business, numbers can be 'spun' like anything else. When faced with a responsibility to push the numbers as far as you can, exaggeration and not-quite-so-honest routes are explored to make the boss happy. This has also been going on since fish-stories began.
    It is sad to see FCA singled out and bashed prominently on the media once again.
    I'm only glad that I can sleep well at night. :)
     
    valiant67 likes this.
  3. Dave Z

    Dave Z It's me, Dave
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    I am agreeing with Chrysler on this one. It's a single dealership group that represented itself as two dealerships, they were dropped and presumably bear a grudge, and they have lots of other brands. I will not deny that there may be one or two bad apples in FCA US' zones - I learned to thoroughly distrust those guys (not all of them, but some proved themselves to be slime.)

    That said, it seems highly unlikely this is a systemic issue, and you can bet from now on FCA will be looking at dealership sales near the end of the month to find patterns.

    And that's true too - the question is whether FCA US people made the demands that are claimed. If so, how far the rot spread.
     
  4. Gerry G

    Gerry G Well-Known Member

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    Not certain what the proposed remedy of the lawsuit is; that is, what are they looking to accomplish or prevent? Seems to me if this were widespread it is like a pyramid scheme that would eventually result in a massive overstock and a collapse in sales when this overstock has to be liquidated.

    This is what makes for sometimes better deals at month's end. I got a set of tires at cost because the shop manager determined that this would make his quota and get him a better discount from the brand manufacturer.

    Gerry G.
     
  5. ImperialCrown

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    It's probably not that widespread and in this case, sounds more like 'sour grapes' from a disgruntled dealership owner.
    I know that at the end of the month or the quarter, there is a scramble to make the numbers where I work.
    Parking and speeding tickets seem to gain momentum at month's end also. :D
     

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