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Chrysler dealers question demands for investment

ChryslerJeep is resigned to losing a small minority of its franchised retail network as it gears up for greater volume and the 2005 launch of the Dodge franchise.

Investment requirements to handle the new brand will account for the shake-up. The company believes some of its retailers are not prepared to think about higher volumes and are, instead, content to shuffle along with low sales.

“Realistically, there will be some change in the network because some of our dealers won’t come with us,” says Lawrence Good, ChryslerJeep sales director.

“It will be compulsory to take on the Dodge franchise and it will push volume and viability through dealers. They will need to invest over the next few years, but this will be tempered in corporate ID – it’s better for them to invest in process and people than buildings.”

Of the 60 dealer partners, operating 89 outlets, 40% are solus sites, which keeps them highly-focused on the franchise. Good says a third are “very good” retailers, making decent profits, while half understand what they are doing and what they need to do, but need help to develop. “The remaining 20% we want to come with us – we don’t want to lose any dealers – but they haven’t got the appetite to sustain what is coming. They are happy to sell low volumes,” he adds.

“We will help them to sell their premises if they want to get out, so they can realise their assets.” ChryslerJeep UK managing director Simon Elliott believes the Dodge franchise will create more viability for the dealer network – eventually leading to a doubling of annual sales volumes.

He is also looking to expand Chrysler sales on the back of the forthcoming 300C and Crossfire Roadster, which should push market share above 1%. For the past four years it’s been stable around 0.7%.

“The challenge is to improve product quality further – that’s the number one priority at the Auburn Hills factory right now,” says Elliott.

“We also need to develop the Chrysler brand in the UK. Everyone knows what Jeep is; we need to reposition and get into focus the Chrysler brand on the back of new models like Crossfire Roadster and the 300C. And there’s the challenge of positioning the Dodge brand in the UK – and with that comes a fundamental development of the dealer network.

“We have lots of work to do with the culture and facilities – there are lots of small showrooms and old signage – and how they are funded and financed when selling twice as many new cars, twice as many used and twice the aftersales business.”



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