Fiat Chrysler said its streak of 75 consecutive monthly sales increases actually ended nearly three years ago, and announced it is changing the way it calculates those sales. The automaker said it would not have to restate any earnings. Among other changes would be new ways to account for the sale of a vehicle one month, and the dealer having to take it back the following month, when, for instance, a customer could not obtain financing. The Justice Department and the Securities and Exchange Commission are looking into the reporting practices that have been challenged by some dealers. FCA has said the dealer actions are without merit. It also said its research indicated that “competitors have used broadly similar approaches in compiling month sales data.”
Fiat Chrysler reported its second quarter operating profit, before interest and taxes rose 14 per cent and earnings per share topped Wall Street expectations. Bloomberg reported that earnings were hurt by the recall of vehicles with the defective Takata airbags. It also said FCA’s full year forecast indicated it expects a slowdown in the final six months of 2016 due to slow demand for its small and mid-sized sedans. Jeep demand is expected to remain strong, along with the company’s Ram pickups. It is taking steps to increase Jeep production, and will invest nearly $1.5 billion in its Sterling Heights, Michigan plant to build the next generation of Ram pickups.
Volkswagen has won preliminary approval from a federal judge in California for its proposed settlement with regulators and owners of vehicles with the 2.0-liter diesel engine. Final approval may come in mid-October. The settlement covers 475,000 owners who would be able to choose whether to have their cars fixed so they would meet pollution standards or agree to a buyback. USA Today noted that VW has yet to win approval from the EPA and the California Air Resources Board for its plan to fix the vehicles.
Porsche announced it will skip the 2017 Detroit auto show to concentrate on what it considers more important markets for its products – the shows in Los Angeles and New York.
Eighty two percent of those surveyed by KPMG said they would be wary or never buy from an automaker if their car had been hacked. This as automakers continue to make heavy investments in autonomous and connected car technology. “Unlike most consumer products, a vehicle breach can be life-threatening, especially if the vehicle is driving at highway speeds and a hacker gains control of the car. That is a very scary, but possible scenario, and it’s easy to see why consumers are so sensitive about cyber security as it relates to their cars,” said Gary Silberg, KPMG’s Automotive Sector Leader. He said auto companies need to take action to make cyber security a strategic imperative to ensure they are doing everything possible to protect the drivers of their vehicles.