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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.

NHTSA investigating 110,000 Ram 2500s and 3500s, one death alleged

The National Highway Traffic Safety Administration has launched an investigation focusing on 110,000 Dodge Ram 2500 and 3500 pickups from model years 2004 to 2006. One death has already been reported, according to NHTSA, due to a potential fault with the clutch interlocks on manual-transmission versions of the heavy duty pickup.
According to the report, these trucks can be started without depressing the clutch. There have been three reports so far, and as we mentioned above, one very sad incident seems to have resulted in the death of a child.
"One complaint involved an incident that occurred when a child was able to enter the vehicle and start the ignition without depressing the clutch. The vehicle then moved forward striking another child resulting in a fatality," NHTSA said in the investigation bulletin, which you can view below.

Will Dodge limit 2015 Challenger SRT Hellcat to 1,200 units?

With over 700 horsepower on tap and a price tag barely over $60k, Dodge appears on paper to have a winner on its hands with the new Challenger SRT Hellcat. But if you want to get your hands on one, you may have to act quicker than this most powerful of muscle cars covers the quarter-mile.
That's because, according to our compatriots over at Edmunds, Dodge may limit production - in the first year, at least - to just 1,200 units. That would amount to barely a quarter of the Challengers that Dodge moves each month, and would also mean only one Hellcat for every two Dodge dealers in the US - which could lead to some serious contention over which stores and which customers can get their hands on the ultimate Challenger.
Reached for comment, SRT spokesman Dan Reid told Autoblog that "there is no plan to limit production of the Challenger Hellcat," echoing the words of Dodge CEO Tim Kuniskis who told Edmunds: "We don't know what the market demand is." Which doesn't mean that it won't restrict production, but doesn't mean that it will, either. It just hasn't decided yet - or announced any such decision, at any rate - over what will be the final allocation strategy for what could be a game-changing muscle car. That is, at least, until new versions of the Mustang and Camaro come along in pursuit of Dodge's bragging rights...