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Efforts to consolidate might go more quickly during slack economy
By Mike Ramsey
Bloomberg News
Published on Wednesday, Jun 11, 2008
Chrysler LLC reduced its number of U.S. dealerships by 196 in the past year and increased the percentage of outlets selling all of its brands, as the automaker tries to create a stronger sales network.
The company had 3,488 outlets at the end of May, a decline of 5.3 percent from a year earlier, said Steve Landry, executive vice president of sales for North America.
Fifty-eight percent had Chrysler, Jeep and Dodge brands under one roof, rising from 52 percent.
Chrysler, the third-largest U.S. automaker, wants to boost the sales volume at each dealership. The pace of consolidation could move more quickly as falling real estate values and declining auto sales convince more of the Auburn Hills, Mich., company's dealers to sell, Landry said. Chrysler's U.S. sales through May slid 19 percent, the most of any major automaker.
''With the economy the way it is behaving at the moment, there are a couple of things that are creating a reason to reevaluate whether they want to be a buyer or seller,'' Landry said. About 75 deals are in negotiations now to create combined dealerships, he said.
In Summit County, the Thomas Chrysler Jeep and KO Jeep franchises were bought out in 2007 by other dealers as part of the ongoing industry consolidation.
The sales volume at the newly combined dealerships is higher than the sum from the previously separate outlets, Landry said. The automaker couldn't immediately provide figures.
Chrysler in February announced ''Project Genesis,'' an effort to eliminate overlapping models in its brands and consolidate all three in single dealerships. The company also wants to reduce marketing and product development costs associated with having similar vehicles in more than one brand.
Most of the dealership reduction has been in the Northeast, Mid-Atlantic and Midwest regions, Chrysler spokesman Stuart Schorr said.
Chrysler wants fewer outlets in some major cities. For example, the company said in February that its goal is to trim the number in the Detroit area to 19 from 44 and in the Boston area to 10 from 22.
Chrysler LLC reduced its number of U.S. dealerships by 196 in the past year and increased the percentage of outlets selling all of its brands, as the automaker tries to create a stronger sales network.
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