Two Chicago area Fiat Chrysler dealerships owned by Napleton Automotive Group have filed a civil racketeering suit against the automaker accusing it of bribing dealers in exchange for having them falsify sales figures, Automotive News reports.
The suit alleges FCA offered Edward Napleton $20,000 “to falsely report the sales of 40 new vehicles” at the end of a certain sales month. The dealers was then asked to “back out” of the sales “before the factory warranty on the vehicles could be processed and start to run.” It also says FCA officials were aware of the bribes and false sales reporting but rewarded local sales managers for meeting sales goals anyways.
According to the suit, the practice “results in the inflation of the number of year-over-year sales which, in turn, create the appearance that FCA’s performance is better than, in reality, it actually is.” FCA responded to the accusations, saying they are false and they intended to “defend this action vigorously.”
“While the lawsuit has not yet been served on FCA US, the company believes that the claim is without merit and was filed by internal counsel to the dealer group as FCA US has concurrently been discussing with the dealer group the need to meet its obligations under some of its dealer agreements,” the automaker said.
The filing also states a nearby FCA dealership that it competes with directly was offered a similar deal in exchange for fudging the sales numbers of 85 vehicles. They were apparently given “tens of thousands of dollars,” for playing along in the scheme.
In addition to the bribes, Napleton also accuses FCA of strong-arming dealers through the use of stair-step methods in its Volume Growth Program (VGP). This would require dealers to meet month sales goals in exchange for payment on each vehicle sold, however those vehicles who didn’t meet 100 percent of the goal got nothing at all. The VGP was altered at the beginning of the month to allow those who met 90 percent of their goal to receive monetary compensation.