Toronto, Ontario — After circulating reports of Fiat Chrysler Automobiles (FCA) pushing unordered excess vehicle inventory on its United States dealerships, some Canadian counterparts are feeling the pressure to take in more vehicles—or run the risk losing co-op advertising support from the automaker.
Reports from Canadian FCA dealerships say that, in some cases, facilities have been forced to take in several months’ worth of the automaker’s excess inventory—something the automaker is calling “a condition to qualify for Co-Op and Merchandising funds until further notice,” it stated a memo from November 2019.
Automakers traditionally offer co-op support programs to help dealers pay for ad campaigns or marketing programs.
On Dec. 20 Bloomberg reported that FCA was making an “all-out push” to clear away tens of thousands of vehicles that its U.S. dealerships had not ordered by offering “its most aggressive discounts since the financial crisis,” according to Bloomberg’s report.
Bloomberg also cited an anonymous source familiar with the matter, saying that FCA had about 70,000 vehicles in excess inventory at one point in December. That figure was reduced to 25,800 in mid-December, as FCA representatives were allegedly urging dealers to take on more figures and drop that number even further.
The company later denied it was using dealers to clear its inventory.
FCA recently trimmed output at four of its plants, including one in Windsor, Ont., which was shut down for two weeks between Jan. 13 and Jan. 24. The Windsor plant will also cancel its midnight shift come the end of March.