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Dealers: FCA bribed for fake sales

by David Zatz on

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.

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.

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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.

David Zatz founded Allpar in 1998 (based on a site he had begun in 1993-94), after years of writing reviews for retail trades. He has been quoted by the New York Times, the Daily Telegraph, the Detroit News, and USA Today. Before making Allpar a full-time career, he was a consultant in organizational psychology. You can reach him by using our contact form (much preferred) or by calling (313) 766-2304

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