Automotive News Canada - August 2016 - 20

* AUGUST 2016

Internal FCA review finds
inflated sales numbers
FCA Canada adopts new
U.S. system; marks
14 per cent decline
BY AUTOMOTIVE NEWS CANADA

AN INTERNAL REVIEW
ordered in 2015 by top Fiat
Chrysler executives uncovered
thousands of vehicle sales reported by FCA brands in the United
States and Canada for which
there were no actual buyers,
according to company sources.
The insiders told Automotive
News Canada sister publication
Automotive News that following
the inquiry, U.S. sales head Reid
Bigland put a stop to the practice, which had resulted in FCA
reporting more sales than were
actually made.
Bigland, who holds both
Canadian and U.S. citizenships, is
CEO of FCA Canada, head of U.S.
sales and was recently named to
global head of Alfa Romeo and
Maserati.
The sources did not specify the precise time period covered by the review but said it
revealed that 5,000-6,000 vehicles
had been reported as sold in the
Unites States by dealers and then
"unwound" (deemed unsold).
They said the sales numbers
were inflated in part under pressure to preserve FCA's streak of
U.S. monthly year-over-year sales
increases.
One source cited dealer complaints about the practice that
reached CEO Sergio Marchionne
before Bigland sought to end
it. But he added that overstating sales had crept back into
play this year as competitive
pressures on FCA's field staff
increased.

es would be reflected within
a month. They were, in fact,
changed within a week, the new
system recording a near 14 per
cent drop in July 2016 sales from
a revised tally in July 2015.
FCA said in a statement the
objective of the new sales reporting methodology was "to provide
in FCA U.S.'s judgment the best
available estimate of the number
of FCA U.S. vehicles sold to end
users through the end of a particular month applying a consistent
and transparent methodology."
The automaker said it went
back and reviewed past monthly U.S. sales reports using the
new methodology. It found a
three per cent monthly decline in
September 2013, when it had previously reported a one per cent
increase.
Likewise, in August 2015, its
U.S. sales would have slipped one
per cent, instead of the two per
cent increase it reported. And
as recently as May 2016, its U.S.
sales would have dropped seven
per cent instead of the one per
cent gain it reported. An FCA
Canada official said figures for

Canada were not available.
FCA confirmed July 18
that its sales reporting process was under investigation by the U.S. Securities and
Exchange Commission and the
U.S. Department of Justice after
reports in Bloomberg News and
Automotive News. Federal investigators visited all nine of FCA's
regional business centres on
July 11 and spoke with current
and former employees as part of
their investigation. It's unknown
whether the searches and interviews were conducted under a
warrant.
FCA was sued earlier in 2016
by two of its dealerships owned
by the Napleton Automotive
Group. They accused the automaker of a civil racketeering violation for falsely reporting sales,
among other allegations. FCA
sought dismissal of the federal
suit in March, calling the allegations "baseless" and a "smear
campaign" conducted by disgruntled dealers. - ANC
- With files from Larry P.
Vellequette, Automotive News

Company sources say that after
an internal review, Reid Bigland,
president and CEO of FCA Canada,
put a stop to sales reporting that
showed a 75-month U.S. sales
streak. PHOTO: JOE KNYCHA

FCA CANADA RE-EVALUATED
Fiat Chrysler Automobiles
Canada said July 29 it was evaluating its monthly sales reporting system in light of changes
announced July 26 by FCA US
that would make the company
more "transparent."
The fallout isn't pretty, as
FCA said its 75-month U.S. sales
streak actually ended nearly
three years sooner at 40 months,
in September 2013.
FCA Canada followed by saying that any reporting chang-

Lindo lands PR post at JLR

New desking solution from Dealertrack

INDUSTRY VETERAN JOHN LINDO IS NOW
Public Relations and Communications Manager
at Jaguar Land Rover Canada.
He founded and was president of Razor Voice Inc., conducting pr, marketing, digital media, event and advertising programs. Before that
he served as manager, product and corporate communications for Nissan/Infiniti
Canada Inc. He was also
John Lindo was
manager, public relations
president of
with Bridgestone/Firestone
Razor Voice, Inc.
Canada.
Lindo replaces long-time JLR PR chief Barbara
Barrett who is launching her own company, promoting such projects as the Invictus Games 2017
with Jaguar Land Rover backing.

MISSISSAUGA, Ont. -
Dealertrack Technologies
has expanded its F&I solutions suite with a desking
component powered by
DealerCorp technology.
The partnership
unites Dealertrack's credit application network
and DealerCorp's intuitive technology to connect showroom and business office with a seamless, integrated workflow,
enabling dealers to work
with customers in realtime to structure deals and
payment options, build
confidence and satisfac-

tion through transparency, and smooth the process.
The car shopping experience is "the key to closing deals and creating a
satisfying experience,"
said Mark O'Brien, senior
director, Dealer Solutions,
at Dealertrack. "Working
on the structure of a purchase, including financing, can be the difference
between making the sale
or having them walk out."
For Gordon Leach,
CEO, DealerCorp, "The
partnership was exactly
what we were looking for."

FCA changes sales
reporting structure,
with dramatic results
Ford F-150
continues its hot
streak, accounting
for nearly half
of all July sales
for the company
By JEREMY SINEK
TORONTO CORRESPONDENT

FCA CANADA SWITCHED
to a new sales-reporting
protocol in July and the
result was startling. In
one fell swoop, its reported sales fell 13.8 per cent,
breaking a 79-month streak
of year-over-year gains.
That's not all. With Ford
of Canada simultaneously
posting its best July sales
ever - a gain of 9.5 per cent
- Ford not only outsold
FCA for the month; it also
moved ahead in year-todate sales.
Ford's gangbuster
July, though, was an outlier in a month that saw
overall sales slip 2.6 per
cent from a year ago over
an unchanged number of
selling days. Most mainstream brands lost sales,
with only Hyundai and Kia
joining Ford in the black.
European luxury brands
all prospered in July, as
did Subaru.
For the industry as a
whole, sales remain 4.6 per
cent ahead year-to-date.
FCA's new reporting
format is keeping number
crunchers busy, as each
model's July and year-todate sales for 2015 have
also been adjusted (in most
cases, only marginally)
from what was previously
reported.
In the United States,
FCA has revised its sales
data going back to 2011;
FCA Canada is working on
the same thing but it could
take a few weeks to complete, a spokesperson said
in early August.
Curiously, FCA
Canada's revised report
sheet no longer summarizes its sales into Passenger
Cars and Light Trucks;
instead, the subtotals are
grouped under the headings "Car and MPV," "UV"
and "Truck and LCV." This
makes it less obvious how
few passenger cars FCA
sells compared with light
trucks as conventionally
defined.

F SERIES HOLDS LEAD
As for Ford's blockbuster July, it's noteworthy that a staggering 46 per
cent of Ford's July sales
were achieved by the F
series pickup. The truck's
13,585 July sales count - a
21 per cent increase over
last year - was more than
double the sales of all eight

MOVERS
& SHAKERS

(Compared to July
a year ago)
* Kia Sedona +400% on
the strength of a fleet
sale of nearly 700
vehicles to a rental
company.
* FCA sales down13.8%
(new reporting)
* Ford F series: +46%
* Hyundai Tucson +85%,
Santa Fe down 12.4%
* Honda Civic outsells
Hyundai Elantra

Ford/Lincoln car models
combined.
Further underlining the
dominance of the F series,
GM and FCA each reported only 8,000-and-change
sales of their own full-size
pickups.
Ford's next-biggest seller, the Escape, recovered
in July and managed to get
back ahead of the Toyota
RAV4 challenger for the
month. But it still didn't
reclaim its long-time compact CUV leadership: this
time the Honda CR-V not
only led the segment with
all-time record sales, it also
came close to out-selling its
Civic sibling.
The perennial car sales
leader in turn was outsold in July by the rival
Hyundai Elantra. A Honda
Canada statement said
Civic sales could not match
the exceptional results
from last year, though in
fact Civic's July 2015 sales
were also a decline from
2014.

ATTENTION GRAB
The Elantra's July carsales crown isn't the only
attention-grab by the automakers from Korea. Sales
of Hyundai's smallest tall
wagon, the recently redesigned Tucson, are on a
tear, up 85 per cent year-todate, while the next-size-up
Santa Fe Sport is down 12.4
percent.
At Kia, Tucson's sister vehicle, the Sportage,
is also surging since its
recent redesign. But a real
eye-opener was the 400 per
cent spike in July sales of
the traditionally low-profile Sedona minivan. Kia
Canada has been paying
extra attention to marketing the Sedona, said communications manager
John Adzija, and its sales
were already up 19 per cent
through June. July's spectacular break-out, however,
was mainly on the strength
of a single fleet deal: 693
sold to a car rental company. - ANC

Table of Contents for the Digital Edition of Automotive News Canada - August 2016