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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.

Stellantis announces ‘Circular Economy’ business to drive revenue, decarbonization

Stellantis has already announced its plans to reach net-zero carbon emissions by 2038. Today, the automaker has announced a new business unit to help it reach that goal while generating 2 billion euros per year in revenue by 2030. The “Circular Economy” business will help make revenue less dependent on finite, rare and ecologically problematic materials. The Circular Economy model features what Stellantis calls a “4R” strategy, comprising remanufacturing, repair, reuse and recycling. The goal is to make materials last as long as they can, reducing reliance on the acquisition of those precious new materials in the future by returning them to the business loop when theyÂ’ve reached the end of their first life. Through these processes, Stellantis says it can save up to 80% raw material and 50% energy compared to manufacturing a new part. Remanufacturing, or “reman” in Stellantis shorthand, means dismantling, cleaning and rebuilding parts to OEM spec. Nearly 12,000 remanufactured parts are available for customers to purchase. Some remanufacturing is done in-house, and some with partners and through joint ventures. Repair is pretty obvious — fixing parts to put back into vehicles. This also consists of reconditioning, to make a vehicle feel like new. Stellantis boasts 21 “e-repair” centers for repairing electric vehicle batteries.  Reuse refers to parts still in good condition from end-of-life vehicles sold as-is. Stellantis says it has 4.5 million multi-brand parts in inventory. These are sold in 155 countries through the B-Parts e-commerce platform. Reuse also refers second-life options, such as using batteries outside of automotive purposes. Recycling involves dismantling parts and scraps back into raw material form that is then looped back into the manufacturing process. Stellantis says it has collected 1 million parts for recycling in the past six months. Recycling doesnÂ’t get counted in that aforementioned 2 billion euros of revenue, but it does save the company money on acquisition of raw materials. As for batteries, specifically, Stellantis expects this recycling business to ramp up after 2030, when the packs currently in service begin to reach the end of their lifecycle. Stellantis will use its new “SUSTAINera” label to denote parts that are offered as part of its Circular Economy business.

Ram introduces latest 'Built to Serve' pickup honoring U.S. Air Force

Ram announced Thursday that the third of its five-truck "Built to Serve" series will officially launch Friday. The latest edition, finished in either Anvil or Billet Silver, honors the U.S. Air Force on the anniversary of its founding.  "Ram continues to honor all of those who serve or have served in the United States armed forces with distinction through our latest ‘Built to ServeÂ’ offering," said Ram chief Mike Koval Jr., in FCA's announcement. "The ‘Built to ServeÂ’ adage is something Ram truck owners, whether civilian or military, are very familiar with as itÂ’s something we strive to build into every truck and van we produce."   FCA is releasing a new truck approximately once every three months, each commemorating one of the five branches of the U.S. Armed Forces — Army, Navy, Air Force, Marines and Coast Guard. Deliveries of the latest model are set to begin this week to coincide with the 73rd anniversary of the Air Force's establishment as a separate branch on Sept. 18, 1947.  "Built to Serve" models are easily spotted thanks to their prominent rear quarter panel decals. Cosmetic upgrades include an all-black grille and surround, black badges, side steps, black four-inch exhaust tips, body-colored wheel arch trim, and 20-inch wheels finished in Technical Gray. The option price adds the Off-Road Group, which bundles features such as underbody skid plates, electronic-locking rear axle, off-road shocks, tow hooks, and all-terrain tires.  In total, FCA will sell 9,000 "Built to Serve" editions divvied up so that each branch gets two appropriate color choices out of 10 total: Gator (1,000 units) and Diamond Black (1,000); Ceramic Gray (1,000) and Patriot Blue (1,000); Anvil (1,000) and Billet Silver (1,000); Tank (1,000) and Flame Red (1,000); and Spitfire (500) and Bright White (500). The up-charge regardless of variant is $2,795.