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The EPA has alleged that FCA installed undisclosed emissions software in about 100k Ram and Jeep diesel models [UPDATE]

Update: The text has been updated with official information from the EPA given in a press release and a conference call. Although an initial report from Reuters said the EPA will accuse Ram and Jeep of using emissions defeat devices today, that isn't quite the case. In a press release and a conference call, the EPA stated that the notice of violation sent to FCA is for the installation of eight undisclosed auxiliary emissions control devices on 2014 to 2016 Jeep Grand Cherokee and Ram 1500 models with the 3.0-liter turbodiesel V6. The violation applies to about 104,000 vehicles in total. The agency also explained that auxiliary emissions controls on vehicles are not necessarily illegal, but installing them without disclosing them to the EPA when having the vehicle certified is. Though this initial notice of violation is for installing undisclosed software, the EPA may soon also classify these emissions devices as defeat devices, as it did with the software Volkswagen used. Depending on the outcome of the investigation, there could be fines of up nearly $45,000 per vehicle involved in the notice of violation. The agency revealed that the software alters how the emissions system performs in certain situations. In controlled testing, the vehicles are compliant, but in conditions such as high speed operation, the EPA found the vehicles would produce much higher levels of NOx emissions. The EPA is continuing to investigate, and is waiting for FCA to explain why these emissions control devices are not cheating or defeat devices. In an official statement, FCA stated it is looking forward to explaining that the software does not constitute a defeat device, and has also proposed software updates to achieve compliance. During the conference call, EPA representatives also noted that the vehicles are still safe and legal to be driven, and that owners do not need to take any action yet regarding their cars. It should be noted there is no stop-sale on current models at this time. Additionally, 2017 versions of the 3.0-liter diesel FCA vehicles have not been emissions certified yet. Related Video: News Source: Reuters, Environmental Protection Agency Government/Legal RAM

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.

2022 Ram 1500 TRX MSRP up another $2,795

We're not sure if we should be more awed by how fast and how high the new batch of super performance trucks can jump, or that consumer prices are jumping just as fast and just as high. When we published our First Drive Review of the 2021 TRX at the end of November 2020, we wrote, "Another pitfall to Ram TRX ownership is the cost. Ram asks a minimum of $71,790 for the TRX (including a $1,695 destination charge)." When we published our review of the 2022 TRX six weeks ago, the base price had risen to $74,085 after destination (optioned out to $91,575). Considering what the world's been up to for the past 15 months, a $2,295 MSRP increase — a mere 3% — couldn't be considered banditry. But the P/L department at Stellantis is done playing nice. As Mopar Insiders discovered, the MSRP for the 2022 Ram 1500 TRX is $76,880, which is before a spendier destination fee of $1,795. Anyone who wants to own a TRX this year will need $78,675 before options.   It's almost comical that Ram advertises the hurt on its configurator. Click to build and price the 2021 TRX, the configurator shows $70,245 before destination. Change that 2021 to 2022, the configurator shows $76,780. There's a bit more sleight-of-hand during the build process, too, as Ram charges $100 for the sole solid color available, which is black, that sum added as an option even though its the least expensive paint choice possible. The two-tone paints cost at least $200, despite a few of them advertising a price of zero. The diabolical cherry on top is when you check the total after options and read the small print, which informs you, "Pricing provided may vary significantly between website and dealer as a result of supply chain constraints. Pricing shown is nonbinding and does not constitute an offer. Contact your dealer for updated vehicle pricing."  Admittedly, the TRX is only up 4% over the last base price we posted, and we don't expect the new price to deter buyers. We don't blame Ram, either; this is the cost of doing business, and a quick trip to Craigslist or eBay will illustrate that everyone is trying to do the same kind of business, getting every hand into every cookie jar. The Ram buyers who really have it bad are the ones after a 2022 Ram 1500 Laramie. That truck went up $7,180 bucks — a gut-punching 16.4% — to $50,845.