Auto-sales reporting is under the regulatory micro-scope and the result could be a major overhaul of the way car companies report transactions.
The most extreme outcome of U.S.-led investigations into Fiat Chrysler Automobiles (FCA) and U.S. sales chief Reid Bigland could be an end to the monthly sales reports that are unique to the car business and much watched by industry players, stock analysts and the media. More likely, however, is stricter oversight of the way sales are measured during the often-complicated handoff from manufacturer to dealer to customer.
“At some point, some-body needs to step in and set some boundaries,” says Dennis DesRosiers, president of DesRosiers Automotive Consultants and Canada’s best-known automotive number cruncher.
Manufacturers and dealers have a full tool-box of options for boost-ing sales figures, from discounted fleet sales to setting high residual values on leases to lure customers with low month-ly payments. Most, says DesRosiers, fall into a “grey area” with limited impact beyond the down-the-road hit on automaker and retailer profits.
But others, such as manufacturer programs that tie dealer incentives to ever-increasing sales quotas, “can lead to some very abhorrent behaviour” in which truckloads of new vehicles arrive at dealerships and are immediately declared sold.