Fiat Chrysler Automobiles Says Lawsuit Against FCA US Is Without Merit

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The share price of Fiat Chrysler Automobiles (FCA) was down by 9.83% at 6.70 euros on the Milan stock exchange on Thursday after trading resumed followed three suspensions.

According to Automotive News, FCA has posted 69 consecutive monthly year-over-year sales gains after recovering from its bankruptcy with the help of the US Government. The lawsuit alleged that FCA US has offered financial incentives to falsely report vehicle sales by reporting retail unit sales in one month and reversing it the next month.

The suit, filed by two dealerships in the Napleton Automotive Group, alleges that Fiat officials were aware of the false reporting of sales and rewarded local managers for hitting sales targets, the report said. This would be the largest current sales streak of any automaker, so we’re talking about a serious situation.

The $20,000 payment would have been disguised “as a co-op advertising credit to the dealer’s account” to not trigger a sales audit and exposing the practice.

The slump came after Automotive News reported on its website that two Chicago dealerships had initiated a legal suit which claims the company had offered certain dealers cash to pretend they had sold more cars than they actually had. Upon this request, which Napleton refused, the dealer principal discovered that one of his employees agreed to falsely report the sale of 16 new vehicles without his knowledge.

Edward Napleton could not be reached for comment on the suit after normal business hours on Wednesday. The company is accused of stating higher sales figures each month to show better performance than what was actually achieved. The identical claims in Chicago court were made by Napleton Arlington Heights, based in Illinois, and Napleton Northlake, based in Florida.

 

“The company is confident in the integrity of its business processes and dealer arrangements and intends to defend this action vigorously”, Fiat Chrysler said. He declined further comment.

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