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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.

Total auto recalls already on record pace in 2014

If you've noticed that there have been more recalls than usual this year, you may be on to something. According to a report from the National Highway Traffic Safety Administration, the US market is on pace to break a record for recalls. In 2013, 22 million cars were recalled. We're only a third of the way through 2014, though, and we've already halved that figure, with 11 million units recalled. That's wild.
Considering the past few months, it shouldn't be a surprise that General Motors is leading the charge, with six million of the 11 million units recalled coming from one of the General's four brands. Between truck recalls, CUV recalls and the ignition switch recall, 2014 hasn't been a great year for GM.
Other recall leaders include Nissan (one million Sentra and Altima sedans), Honda (900,000 Odyssey minivans), Toyota (over one million units in a few recalls), Volkswagen (150,000 Passat sedans), Chrysler (644,000 Dodge Durango and Jeep Grand Cherokee SUVs) and most recently, Ford (434,000 units, the bulk of which were early Ford Escape CUVs). So while it's been a bad year for GM so far, its competitors aren't doing too well, either.

Junkyard Gem: 1990 Plymouth Voyager Turbo

There was a time when the word "TURBO" was king, and even Detroit minivans came with nervous, hair-drier-boosted engines and screaming TURBO badging. Why, some of them even had manual transmissions (sadly, not this van) and in the case of the 1990 Plymouth Voyager Turbo I spotted in a Denver self-service wrecking yard, a lysergic purple paint plus a Bordello Red interior. The first-generation Voyager minivan (not to be confused with the full-sized B-series Voyager van that preceded it) was a tremendous smash hit for Chrysler. Because it came from the K-Car platform, most of the powertrain options available for other members of the many-branched K Family Tree— from the Mitsubishi Astron to the Chrysler turbo 2.5— went into the Voyagers, Caravans, and Town & Countries. The turbocharged 2.5-liter four, rated at 150 horsepower, was an option for the 1989 and 1990 Voyagers. That doesn't sound like much today, an era in which the Voyager's descendants churn out close to 300 horses, but it was lunacy for a front-wheel-drive family hauler that weighed just over 3,000 pounds. And people eventually discovered they could be made far faster than stock. Voyager shoppers could get five-speed manual transmissiona with their Turbo 2.5 engines, though few did. Still, there were more Voyagers and Caravans with the 5-speed than you might think, in part because of the manual transmission's lower cost. The slushbox didn't conquer the Chrysler Corporation Minivan World until 1996. Nissan probably had the most vividly red interiors of the late 1980s and early 1990s, but Chrysler didn't lag far behind. Look at these acres of shiny red plastic and tough, red I Can't Believe It's Not Velour! Because minivans remain useful for decades, most of them have high odometer readings by the time they get junked. So at a little over 115,000 miles, this one may have had a busted speedometer cable. Speedometers reading better than 85 mph were legal after 1981, but perhaps Chrysler decided not to encourage lead-footed hoonery among minivan drivers. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Auntie Entity pitching "the best-loved minivan in the world." Featured Gallery Junked 1990 Plymouth Voyager Turbo View 19 Photos Auto News Chrysler Dodge Automotive History Minivan/Van dodge caravan