Fiat Chrysler Automobiles NV has been manufacturing more cars and trucks than its U.S. dealers are willing to accept, at one point creating a nationwide stock of about 40,000 unordered vehicles and stoking tension with some of its retailers.Bloomberg
No demand for polluting gas cars?
Four dealers, two of whom spoke on the condition they not be named, said Fiat Chrysler has revived what’s known in industry circles as a “sales bank.” The practice is decades old and frowned upon by investors and analysts because it can obscure an automaker’s inventory figures. Dealers don’t like it because it can amp up the pressure companies place on them to take delivery of vehicles they don’t want.Bloomberg
Don’t you love when you make a shitty car nobody wants to buy, but then just force your dealer partners to buy the excess production?
Chrysler implemented sales banks in the run-up to the two times it needed rescues from the U.S. government, in 1980 and 2009.Bloomberg
That’s weird… why would they implement it now when the future looks so bright for polluting cars?
While the company is nowhere near that sort of troubleBloomberg
Yes, clearly not in any trouble. No trouble I can see here.
Fiat Chrysler denies that it has restarted a sales bank. The company says it put a predictive analytics system in place early this year that aims to better align its supply chain and manufacturing plans with anticipated dealer orders.Bloomberg
ahhh predictive analytics! it’s the future! this is the most innovative corporate move since Fox News bought MySpace!
Fiat Chrysler recently agreed to pay a $40 million penalty related to filing years of sales reports the U.S. Securities and Exchange Commission said were fraudulent. One way the company inflated figures, the SEC said in September, was by paying dealers to report fake sales.Bloomberg
If only there was a team of conspiracy theorist losers obsessed with car companies reporting fake sales. Then maybe they could expose this massive fraud.
Auto sales have been slowing industrywide this year, and the Italian-American automaker started building up the bank of unassigned cars this summer. Some dealers were looking to pare back inventory after being burned by rising interest rates that increased the cost of holding cars, and what some say was a lack of incentive support from the company to boost sales of older models.Bloomberg
True, car sales have been slowing industry wide — at least, sales for cars that pollute and run on gasoline.
While Fiat Chrysler’s U.S. sales and market share were roughly flat last quarter, it struggled along with other automakers to move old model-year inventory off dealers’ lots. It took Fiat Chrysler dealers 101 days on average to sell each vehicle during the quarter, 24 more days than the industry average, according to market researcher Edmunds.Bloomberg
Yes, you heard that right. On average a Chrysler is sitting on the lot for 101 days before it gets sold. For Tesla that number is around 14 days — I think the worst it got in Q1 2019 was almost 30 days.
Working with our dealer network to achieve and maintain discipline with stock levels continues to be one of our top priorities,” Manley said on the call, hours after a preliminary merger agreement with PSA was announced. “In North America, our dealer stock is now in line with demand.”Bloomberg
Key word “is now”.