Chrysler flexes parts arm
Carmaker to use after-market division to generate revenue until new products arrive
Alisa Priddle / The Detroit News
April 6, 2010
Chrysler Group LLC is trying to leverage the strength of its Mopar parts division to boost its bottom line and reputation for customer service.
For many enthusiasts, the word Mopar is synonymous with Chrysler vehicles. For others, it refers to a company-made part. Chrysler's new management wants Mopar to stand for everything a customer experiences after the purchase of a new car -- from oil changes to seat covers.
Mopar is Chrysler's fifth brand, after Chrysler, Jeep, Dodge Car and Ram Truck. And during the automaker's new product drought, its importance has grown as a means to draw people to the dealership, inspire consumer loyalty and generate revenue for a company whose sales and profits slid until it was forced to declare bankruptcy and form a partnership with Fiat SpA.
Pietro Gorlier is responsible for ensuring Mopar is profitable and building a reputation for quality parts and service.
He was brought over from Fiat SpA by Sergio Marchionne, CEO of both companies.
"Mopar, our parts distribution business, has been reconstituted as a business under Pietro Gorlier's leadership," Marchionne said in November when Mopar's new role was outlined.
Mopar has "clearly defined penetration volume and efficiency targets, all of which are designed to generate a substantial improvement in profitability and to strengthen the equity of our brands," Marchionne said.
"Mopar now stands for everything after the sale," Gorlier said.
Parts and service represent a "huge asset, if managed properly" and is the area where there is the most to gain, said Gary Dilts, senior vice president with J.D. Power and Associates in Troy.
Gorlier said many dealers were more focused on sales -- until that well started running dry.
"When there was no longer traffic in the showroom, dealers turned their attention to service and parts in a way they never had before," he said. They recognize "survival depends on having efficient and reliable aftermarket."
Market share at 8.7%
Chrysler's market share is 8.7 percent, reflecting a lineup with only one all-new 2010 model: the Ram heavy-duty pickup.
"Fixed costs don't go down just because sales are off," said Randy Berlin, director at Urban Science, a Detroit consulting firm.
Service, parts and accessories are a way to drive revenue now and help bridge the gap until new products draw showroom traffic.
Chrysler has several initiatives, including express oil change lanes, extended service hours and more technicians at dealerships, better logistics to ship and stock parts, easier to install accessories and an online Mopar store.
Accessories contribute $400 per vehicle -- and as high as $1,000 on some models. Chrysler's five-year plan calls for the $400 average to grow 50 percent. There are about 10,000 accessories now, and 100 new items are added annually.
Business will grow as vehicle sales increase, but also by promoting how vehicles can be customized with Mopar parts.
Chrysler shows Moparized vehicles at auto shows. Some are on display in New York now.
Because many buyers choose accessories at the time of purchase, Chrysler is developing accessories for new cars earlier so all are ready in time for the launch.
A Mopar eStore launched in December to capture the 35 percent of Internet shoppers who buy parts online.
"I want to sell everything that can be used by someone driving a car," Gorlier said.
Service lacks street cred
All the moves are designed to build on the strength of the Mopar name that dates to 1937.
But while Mopar parts have a good reputation, customer surveys show Chrysler service does not, Gorlier admits.
"We need to take care of service. Only through good customer service experience can you get people back," he said.
MORE AT: http://www.detnews.com/article/20100406/AUTO01/4060322/1148/?source=nletter-auto
Carmaker to use after-market division to generate revenue until new products arrive
Alisa Priddle / The Detroit News
April 6, 2010
Chrysler Group LLC is trying to leverage the strength of its Mopar parts division to boost its bottom line and reputation for customer service.
For many enthusiasts, the word Mopar is synonymous with Chrysler vehicles. For others, it refers to a company-made part. Chrysler's new management wants Mopar to stand for everything a customer experiences after the purchase of a new car -- from oil changes to seat covers.
Mopar is Chrysler's fifth brand, after Chrysler, Jeep, Dodge Car and Ram Truck. And during the automaker's new product drought, its importance has grown as a means to draw people to the dealership, inspire consumer loyalty and generate revenue for a company whose sales and profits slid until it was forced to declare bankruptcy and form a partnership with Fiat SpA.
Pietro Gorlier is responsible for ensuring Mopar is profitable and building a reputation for quality parts and service.
He was brought over from Fiat SpA by Sergio Marchionne, CEO of both companies.
"Mopar, our parts distribution business, has been reconstituted as a business under Pietro Gorlier's leadership," Marchionne said in November when Mopar's new role was outlined.
Mopar has "clearly defined penetration volume and efficiency targets, all of which are designed to generate a substantial improvement in profitability and to strengthen the equity of our brands," Marchionne said.
"Mopar now stands for everything after the sale," Gorlier said.
Parts and service represent a "huge asset, if managed properly" and is the area where there is the most to gain, said Gary Dilts, senior vice president with J.D. Power and Associates in Troy.
Gorlier said many dealers were more focused on sales -- until that well started running dry.
"When there was no longer traffic in the showroom, dealers turned their attention to service and parts in a way they never had before," he said. They recognize "survival depends on having efficient and reliable aftermarket."
Market share at 8.7%
Chrysler's market share is 8.7 percent, reflecting a lineup with only one all-new 2010 model: the Ram heavy-duty pickup.
"Fixed costs don't go down just because sales are off," said Randy Berlin, director at Urban Science, a Detroit consulting firm.
Service, parts and accessories are a way to drive revenue now and help bridge the gap until new products draw showroom traffic.
Chrysler has several initiatives, including express oil change lanes, extended service hours and more technicians at dealerships, better logistics to ship and stock parts, easier to install accessories and an online Mopar store.
Accessories contribute $400 per vehicle -- and as high as $1,000 on some models. Chrysler's five-year plan calls for the $400 average to grow 50 percent. There are about 10,000 accessories now, and 100 new items are added annually.
Business will grow as vehicle sales increase, but also by promoting how vehicles can be customized with Mopar parts.
Chrysler shows Moparized vehicles at auto shows. Some are on display in New York now.
Because many buyers choose accessories at the time of purchase, Chrysler is developing accessories for new cars earlier so all are ready in time for the launch.
A Mopar eStore launched in December to capture the 35 percent of Internet shoppers who buy parts online.
"I want to sell everything that can be used by someone driving a car," Gorlier said.
Service lacks street cred
All the moves are designed to build on the strength of the Mopar name that dates to 1937.
But while Mopar parts have a good reputation, customer surveys show Chrysler service does not, Gorlier admits.
"We need to take care of service. Only through good customer service experience can you get people back," he said.
MORE AT: http://www.detnews.com/article/20100406/AUTO01/4060322/1148/?source=nletter-auto