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Fiat Chrysler dumped 40,000 unordered vehicles on dealers

In a move that echoes recent history, Fiat Chrysler has been making more cars and trucks than dealers in the U.S. are willing to accept, with Bloomberg reporting that at one point the automaker had built up a glut of around 40,000 unordered vehicles. That’s led some dealers to accuse FCA of reviving the dreaded “sales bank” accounting practice of obscuring inventory to improve the balance sheet. The company reportedly began building up its inventory of unordered cars this summer despite an industrywide slowdown in sales and an eagerness by some dealers to thin their inventories because rising interest rates are making it more expensive to hold unsold cars. The inventory build-up also coincided with Fiat ChryslerÂ’s efforts to find a merger partner, first with Renault, which fell through, then last monthÂ’s announcement that it will merge with FranceÂ’s PSA Group. FCA denies any such scheme and tells Bloomberg the rising inventory is down to a new predictive analytics system designed to better square supply with demand from dealers that is helping the company save money and narrow the numbers of unsold vehicles. The company recently agreed to pay a $40 million civil penalty to the U.S. Securities and Exchange Commission to settle a complaint that it paid dealers to report fake sales figures over a span of five years. While no one is suggesting that FCA is in dire financial straits — the company saw higher than expected earnings in the third quarter and record profits in North America — the practice has strong historical precedent by Chrysler, which built up bloated inventories in the run-up to its two federal bailouts, in 1980 and 2009. It was also common at GM and Ford during the 2000s, when all three Detroit automakers struggled with excess manufacturing capacity and plummeting sales in the lead-up to the Great Recession. Back in 2012, CFO Magazine wrote about a report that explained automakersÂ’ rationale for the practice and how it works: Say fixed costs for a given factory are $100, and that the factory can make 50 cars. Consumers, however, demand only 10. Under absorption costing, if the company makes all 50 cars, its cost-per-car is $2. If it makes only up to demand, or 10 cars, the cost-per-car is $10. Although each car adds variable costs for steel and other parts, if those costs are low, the company still has an incentive to make more cars to keep the cost-per-car down.

Ram wants its midsize truck situation 'fixed soon'

The rumors of a midsize Ram pickup are like a metronome — sometimes in motion, sometimes dead. This week the rumor is alive, so reports Automotive News. Fiat Chrysler CEO Mike Manley admitted during an earnings call that the lack of a mid-sizer is "a clear hole in our portfolio," and that the Ram product development team is "focused on it." Puzzling that out means finding "a cost-effective platform in a region where we can build it with low cost and it still being applicable in the market." But he wants a solution found soon. During the product roadmap presentation FCA made in June last year, late CEO Sergio Marchionne said the middling pickup would be built in Mexico. That tidbit came after years of Marchionne saying the brand would get in the segment, only to have the idea shot down by Ram bosses. At the 2012 Detroit Auto Show, a year after the midsize Dodge Dakota went off the market, Marchionne said the brand would reinstate a new-generation Dakota, with a better-than-50% chance it would be unibody. In 2013, then-Ram president Reid Bigland said the chances were tiny because the numbers didn't add up. The two men got on the same page, in favor of, in 2014. In March 2016, Marchionne said, "I like that space a lot," and "It's a good space to be in." Exactly one month later, then-Ram CEO Bog Hegbloom said the idea was dead because he couldn't make a business case for it. Come early 2018, even Marchionne had joined the naysayers. He told Automobile, "We did not think it was necessary to re-enter that market after our last experience." The snag was, and remains, that a smaller truck has "a cost structure very similar to our Ram 1500. We have not found an economic way to get this done." Four months later, there's a midsize pickup on the product roadmap. Then, at this year's New York Auto Show, Ram Trucks boss Jim Morrison told us Ram had no plans yet for a smaller pickup, although the division continues to look at its options. Last September an Automotive News report forecast the truck to be built in Toledo alongside the Jeep Wrangler and Gladiator pickup. When Car and Driver asked for clarification about Toledo or Mexico, FCA pointed to Marchionne's comments referring to Mexico. It appears that's the angle Manley and his team are still trying to make work. The Saltillo, Mexico, assembly plant now builds Ram's heavy-duty trucks, but observers expect HD production to move to the U.S. to make room for the smaller pickup.

Idaho Ram dealer offered free elk taxidermy with purchase

A Ram and Jeep dealer in Post Falls, Idaho, was offering free elk taxidermy with the purchase of a new truck. Sadly, the promotion ended yesterday.  Now, is this type of promotion commonplace? I honestly have no idea, but it sure seems novel. Offering free taxidermy of any sort with the purchase of a new car or truck is certainly one thing, but the specificity of the elk really drives it home.  "Hi, I'm looking to buy your blue Ram 1500 Laramie and I just took down this pronghorn that I'd like to get taxidermied for free." "I'm sorry, sir, the promotion only covers elk. But about that Laramie ..." For those wondering, it does seem to be general elk hunting season in Idaho, but after a brief look at Idaho's extensive Big Game Seasons and Rules guide, there is a dizzying number of rules and regulations regarding exactly when and where one can hunt elk as well as what kind of elk one can hunt. Try reading that sentence out loud. Nevertheless, it would logically seem that free elk taxidermy could be enticing for those living in the area of Post Falls, which is in between Coeur d'Alene and Spokane, Washington, near the state border. So hey, why not? Way to get creative Findlay Chrysler Dodge Jeep Ram.  According to the advertisement, the dealer would only cover $1,500 worth of elk taxidermy. Is that enough for a quality taxidermification of your elk? Again, I'd rather not Google that. But it's nevertheless something, right? Related Video: