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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 closes investigation on 4.7M FCA power modules, no recall

FCA US hasn't had the best time with recalls as of late. Not only did the company recently agree to greater safety oversight and paid $105 million to the government, that came just days after hacking fears prompted a 1.4-million model recall campaign. However, a recent decision to close an investigation by the National Highway Traffic Safety Administration means that the automaker doesn't have to worry about another major recall possibly affecting 4.7 million vehicles, according to the agency's report (as a PDF). Last September, the Center for Auto Safety petitioned NHTSA to investigate an alleged problem with the totally integrated power module (TIPM) on these FCA US models. The group claimed that a fault with the component could cause a variety of maladies, including stalls, not starting, catching fire, unintended acceleration, and airbag non-deployment. At the time, it also submitted 70 cases where this had reportedly happened. According to NHTSA, "no valid evidence was presented in support of claims related to airbag non-deployment, unintended acceleration, or fire resulting from TIPM faults and these claims were found to be wholly without merit based on review of the field data and design of the relevant systems and components." The agency did find signs of an issue with the fuel pump relay in some Jeep Grand Cherokees and Dodge Durangos, but FCA US issued recalls for the problem in September 2014 and February 2015. Without anything else to go on, the Feds don't think it's worth investigating this topic any more.

Jeep Wrangler won't get those cutout half doors after all

Let's just make one thing clear right off the bat: If you want to go off-roading and you want an open-air experience, a Jeep Wrangler is probably the right vehicle for you. Really, the Wrangler has always been about enjoying the outdoors with as little between its occupants and the great outdoors as legally possible. That's why the top comes off, the doors stay home, and the windshield folds flat. All that said, however, one cool bit of show-car desirability reportedly won't make into production. Those crazy cutout doors that caught so much attention at the Wrangler JL's debut at the L.A. Auto Show won't be available from Jeep. For now we're reporting this as a rumor, but the report from Jalopnik seems legit. We have a request for comment in to Jeep and will report with confirmation when we hear back. Apparently — and despite the fact that the doors appeared on otherwise production-spec Wrangler models shown to the media and public show goers — Jeep says the cutout half doors were "always a prototype." In the end, traditional half doors were deemed the best option for production. We don't really disagree with the notion that traditional half doors are a better idea than the "prototype" cutout doors, especially considering how much effort went into making the JL Wrangler's doors easier to remove than past versions. Plus, the aftermarket is rife with accessory doors and panels to choose from if the regular or optional half doors aren't to your liking. Still, we're sure some Wrangler JL intenders were looking forward to those unique donut-style metal doors, and so we must pass the disappointment in their direction. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.