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Chrysler to consider London retail viability

Chrysler is looking at ways of better supporting its London dealers following the collapse of Capital Chrysler last year.

One option under consideration is to shuffle its representation towards the outskirts of the city. It already has four dealers circling London close to the M25, while another three are closer to the centre (a fourth is close to being appointed, while replacements for Capital Chrysler are also in talks).

A rearrangement of sites could see all showrooms spear around the M25, while gaps could be filled by appointing more authorized repairers; Chrysler has three in the London region.

Simon Elliott, the Chrysler group UK managing director who takes up a two-year position in China from April 10, says: “We are undertaking a study on how to make London dealers more viable without unfairly supporting ahead of non-London dealers.

“The solution might be fewer but larger dealers that are more strategically positioned on the fringes rather than in the middle of London, and which cover a wider area. We are also looking at the way we distribute cars to dealers, marketing and fleet activity.

“Most people in London are buying online so the showroom is less important. But we need good coverage of convenient aftersales points.”

Chrysler is targeting 23,850 new car sales this year, up 34% on 2005, based on new models. Dealer returns should also improve, with a network average of around 1%. While the spread between top and bottom performers is wide, importantly the number of dealers in profit will rise from 65% of the network in 2005 to more than 90% this year.

“Increased volume, more used car sales, more finance and models that lend themselves to accessories sales will help dealers to improve their profits,” says Elliott, who is keen to emphasize to retailers that his successor – likely to be named within the next two weeks – will pick up where he leaves off. The appointment will come from within the DaimlerChrysler group.

Later this month, Chrysler will hit the road in its second nationwide roadshow, informing dealers about its plans and delivering financial viability packs detailing facilities, training and funding to ensure its network delivers on those plans.

“We are also doing specific sales training on product and business culture and will be taking all the sales staff to Ibiza for the Dodge Caliber,” adds Elliott. “We are investing a lot in our people.”

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