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FRANKFURT -- The Chrysler group wants to consolidate its dealership network, group boss Dieter Zetsche told German newspaper Financial Times Deutschland in an interview published Tuesday.

Zetsche declined to comment on how many dealerships would be closed, but he did say that the dealership consolidation should be brought about by "mergers or also acquisitions."

Chrysler has 4,200 dealerships in the United States.

Zetsche reiterated Chrysler's goal of posting a profit in the current year, and said this included potential one-off restructuring costs.


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[cyboexpo2002]

This doesn't come as a suprise. Previously they've commented that they would prefer that a dealership sell all brands (Dodge, Chrysler, Jeep). This would allow a decrease the number of dealerships. How they plan to do this, however, I do not know. I know the local dealerships around me are laid out in such a way placing multiple brands under one roof would be difficult (small lot size, lack of available land). We'll see what happens...

 

[bradlemp]

I always have thought that dealerships were a problem for Daimler chrysler. The are usually blandly colored and uninviting. i do think all dealers need to carry all chrysler brands, but i dont know if they should close too many. I guess you gotta do what you gotta do to make profit. One thing they should do is take down any signs that say plymouth or eagle on them, becuase i sometime see them around, ad it;s quite embarrassing for chrysler i believe

 

[paul8488]

i have to admit i'm easily impressed by the look of a dealership. around here there are several shiny new multi-story BMW dealerships. they have that 'vending-machine' tower look, and it's very cool. i wanna go buy a BMW, just for the dealer experience. i won't... but i can honestly see how someone with a little less brand loyalty, a lotta cash, and no knowledge of BMW"s current quality woes might head there instead of the 70's-inspired GM dealership down the road!

as for chrysler, whatever. they may as well get a start on closing their dealerships... they'll all be closed by the end of the decade

 

[SUPERBADD75]

One thing they should do is take down any signs that say plymouth or eagle on them, becuase i sometime see them around, ad it;s quite embarrassing for chrysler i believe

that's funny, because i think that same thing. i can't even count how many dealerships i've seen that still say "Plymouth" on their signs, or even worse, on their advertising (billboards). i haven't seen Eagle anywhere in a long while, but i'll bet it's still out there in the more remote locations.

the only problem with Chrysler and Dodge being in the same dealership would be that there would be a lot of cross-shopping the brands. especially their most popular products, the minivans. they really need to think this through before they jump on it. it could result in another phased-out division.

 

[Hudson]

Mercedes-Benz sells (according to 2003 numbers) about 56 vehicles per dealership per month (more than Chevrolet's 53). Dodge sold an average of 35...not bad. Chrysler had about 13.2 and Jeep was down to about 13.

With this as a measurement, brands like GMC (20.9), Hummer (17.8), Saab (16.7), Pontiac (14.2), Cadillac (12.1), and Buick (10.2) should look at trimming up there ranks. Excluding novelty brands (exotics and has-beens like Isuzu and Oldsmobile), only three brands rank lower than Cadillac and Buick (Suzuki, Lincoln, and Mercury).

Looking at the competition, Chevrolet ranks 9th overall (behind the likes of Toyota, Honda, and Ford). Both Toyota and Lexus sold more than 100 vehicles per dealership per month in 2003, and Honda sold 97.5. Ford came in fourth....distantly, with 63.2.

Cadillac wants to compete with Mercedes-Benz, BMW, and Lexus? Their dealers need to have better volume (i.e. more profitability). Cadillac sold 216k units in the US in 2003....through just under 1,500 dealers. Mercedes-Benz did about the same volume (218k) through just 326 dealers. BMW did better volume (240k) through 340 dealers. And Lexus sold nearly 260k through 206 dealers!

 

[paul8488]

very interesting data hudson! it's kinda like the CSV rebadging debate... why does GM need 4 versions of a vehicle to sell the same as (or typically less than) the competition... why does GM need so many dealerships to sell the same amount of vehicles? i suppose it's convenient... there are lotsa little GM dealerships dotted over some fairly rural communities across ontario, for example, and once a buyer develops a relationship they're rarely going to go anywhere else. but your numbers show that GM could be a little leaner there too. what is the cost to GM though? i don't know how it works though... how much GM money goes into the dealerships, and how much comes from the dealership itself?

 

[AJR]

I had a feeling this was coming. I have some thoughts on this.

I was talking to a Chrysler mechanic 4 years ago about the possible loss of the Plymouth brand at his Chrysler-Plymouth store. He said it most likely was going to happen and that he would have to look for another job or retire. His feeling was that with a Jeep dealer a few blocks away, a Dodge dealer a few blocks down the other direction, and his stand alone Chrysler dealership, he figured it would be only a matter of time before they all merge into one dealership with Chrysler/Dodge/Jeep. He figured the new dealersahip wouldn't be able to keep all of those employees so most of them would be given pink slips. I guess that is what is going to happen.

I can't say I'm pleased to see this, but I figured it was coming. Chrysler Group is being condensed to fit into the Daimler regime. Daimler is trying to do more with less because I figure the money isn't there like it was suppose to be. Robert Eaton decreased the number of Chrysler dealers in the 90s, and Daimler is going further with it to get more cost savings.

Which I find ironic because as Chrysler decreases, Toyota is growing. I think Lexus said they open no more than 10 dealerships in a year. Toyota is slowly growing while Chrysler Group is shrinking. The Chrysler Group might as well wave while Toyota passes them by.

I can understand the need to save costs and bring all the units together, but I think this hurts Chrysler as a top luxury make AND it might (eventually) place Dodge as the truck brand. If competition becomes even more fierce, will having Chrysler cars and Dodge cars at the same dealership make sense - if things really get tight?

I guess the chance of Plymouth coming back is becoming more and more unlikely. Why would these dealers try to sell 3 car brands if the object is to cut costs and sell more with less?

I'm just speculating here. I can't really judge if this is a good move or not. I just know I'm kinda glad my grandpa sold his Chrysler dealership when he did. I don't think we'd want to deal with the likes of Daimler.

 

[AJR]

Originally posted by ilaoc77@Apr 22 2004, 12:56 AM
What about the Areas wher the Nearest Chrysler Dealer (from the next nearest) is over 30 miles away? That's dumb... with more dealers you can reach more people.. it's like free advertising.. plus you creat jobs... and you creat more millionares... (haha, like we need more of them!)

I personally dont see a problem with 4200 dealers.. heck.. they might as well have 5000... as long as each dealer is gaining profit annually, there's no problem with many dealerships...

If they think that this would make Chrysler a more prestigeous brand.. by lowering the number of dealerships. I don't think that they're going to get the results they expect.

Your thinking is the old American way of business. I think this is one of the reasons why Chevy and Ford are so big. In my area, when you go out to the farming communities, what do you mostly see? It is usually a Ford or Chevy product. Dodge and Chrysler vehicles are few and far between - unless there is a Chrysler dealer in the area. Likely, these Chrysler dealers are so spread apart that most rural people just go with what they are familiar with - Chevy and Ford.

Of course, Daimler doesn't think about people driving a distance to get something fix. They figure the products will never need to be fixed. And it doesn't help that Chrysler dealers have a bad reputation right now as well. 5 Star? What a joke at times.

 

[AJR]

Originally posted by paul8488@Apr 21 2004, 02:41 PM
as for chrysler, whatever. they may as well get a start on closing their dealerships... they'll all be closed by the end of the decade

What a pessimistic prediction.

 

[jamautogroup]

how dumb can chrysler be.. shutting down dealerships?? thats like shutting down a best selling cars line just to cut down on factories if u have more dealerships youll get more results and for chryslers new vechicles i think they can only go up in sales not down--Crossfire sweet looking coupe--PT Cruiser conv. good idea but do u need 3 conv in the same lineup?? future Crossfire conv Sebring conv and the PT i think is kinda silly put the PT as a coupe not conv..but thats chrysler for ya not thinkin well

 

[paul8488]

Originally posted by AJR+Apr 22 2004, 02:05 AM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (AJR @ Apr 22 2004, 02:05 AM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-paul8488@Apr 21 2004, 02:41 PM
as for chrysler, whatever. they may as well get a start on closing their dealerships... they'll all be closed by the end of the decade

What a pessimistic prediction. [/b][/quote]
well it was kinda tongue in cheek... but chrysler isn't doing much to make me wanna buy stock, whereas i'm impressed with GM's performance, and even impressed (and surprised) at ford's. and i realize the significance of chrysler going belly-up... it would have horrible consequences for north america. still, a GM guy can casually daydream about the demise of a competitor, right?

 

[Hudson]

I don't think you guys understand. It's not "free" to operate dealerships. Any additional dealership costs the manufacturer money...in factory reps, in startup money and loans, in many other ways. When you have, for example, 2,904 Chrysler selling 464k vehicles a year compared to 1,066 Nissan dealers selling 676k vehicles a year...there's a problem. Each Chrysler dealer sells 13 vehicles a month....where the Nissan dealer is seeing 53 vehicles a month pass through. And the argument can be made (through measurements of incentives and transaction prices) that the Nissan dealer makes more money PER VEHICLE than the Chrysler dealer....so the problem is compounded.

If Chrysler were to offer territories to its dealers (like Lexus or Infiniti or Saturn), they would increase the volume per dealership requiring more sales and service people. There would be some job loss, but (competition being what it is) the more productive sales and service personnel would keep their jobs and probably get a raise.

When the "Big 3" (plus some major independents) were expanding after WWII, they opened a franchise in nearly every little town. One of the reasons why Chevrolet and Ford are so popular in this country is that every town had a dealer (4,147 and 3,808, respectively, in the US last year). While Ford is the number four brand according to sales per dealer, Chevrolet is about to be passed by Hyundai (630 dealers), even Infiniti has more volume per dealer than the "volume" Chevrolet brand.

The dealer-in-every-town concept is ancient. Roads are better...cars are better...buyers can travel a few miles to buy a new car. Traveling 30 miles to find a local dealer is not outrageous. With dealer trades, a dealer can have a specific car from someone else's inventory within a day or two.

If Chrysler could retain its current volume, they would be more competitive with 1/3 to 1/4 of its dealers. At 700 dealers, Chrysler would be in the top 10 (vehicle/dealer range of Chevrolet) instead of its current ranking of 28th (behind Pontiac but ahead of Jeep).

 

[jro4566]

Don't decrease dealers, just add a theme! I really like Nissan's new dealer theme - edgy, stylish, shiny...COOL. Chrysler needs a luxury theme, Dodge needs a sporty theme, and JEEP needs an even more outdoorsy theme. Land Rover for instance has a test course at their dealers to try out their 4WD systems. Now that's cool!

 

[stewacide]

But they could better invest in new and restyled dealerships if they had fewer dealers doing higher volumes.

 

[Hudson]

If the dealers made more money (i.e. there were fewer dealers supporting today's overall volumes), the dealers (not the factory) could invest in restyled (or new) dealerships.

 

[AJR]

Originally posted by paul8488+Apr 22 2004, 12:02 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (paul8488 @ Apr 22 2004, 12:02 PM)</td></tr><tr><td id='QUOTE'>

Originally posted by [email protected] 22 2004, 02:05 AM
<!--QuoteBegin-paul8488

@Apr 21 2004, 02:41 PM
as for chrysler, whatever. they may as well get a start on closing their dealerships... they'll all be closed by the end of the decade

What a pessimistic prediction.

well it was kinda tongue in cheek... but chrysler isn't doing much to make me wanna buy stock, whereas i'm impressed with GM's performance, and even impressed (and surprised) at ford's. and i realize the significance of chrysler going belly-up... it would have horrible consequences for north america. still, a GM guy can casually daydream about the demise of a competitor, right? [/b][/quote]
I hear you on your thoughts about Chrysler. It just surprised me that somebody that had the same thoughts I had actually spoke out about them.