Dealers File Racketeering Suit Against Fiat Chrysler

Cars and Drivers

Published: January 14, 2016 12:05 pm

Last Updated: January 13, 2020 3:02 pm

Fiat Chrysler Automobiles N.V. (NYSE: FCAU) has reported that sales have increased for 69 consecutive months on a year-over-year basis, since it exited bankruptcy in 2009. On Wednesday, two of the company’s dealerships filed a lawsuit against Fiat Chrysler alleging that the company offered dealers money in exchange for reporting false sales figures.

The two dealerships are located in suburban Chicago and belong to the Napleton Automotive Group. In the lawsuit, the two dealerships allege that dealers were paid to report phony sales on the last day of the month in order to hit sales targets. Fiat Chrysler was aware of the false reporting and “rewarded local sales managers for hitting sales targets” even though the company officials knew the reports were false, according to a report at Automotive News. The phony sales were then backed out the next day before the warranty period could start running.

Fiat Chrysler responded in a statement Thursday morning:

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 company is confident in the integrity of its business processes and dealer arrangements and intends to defend this action vigorously.

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Fiat Chrysler stock dropped to a new 52-week low of $7.33 early Thursday, down about 7% from Wednesday’s closing price. The stock’s 52-week high is $11.24.

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