Dealer Consolidation

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The following new article was posted in autoweek.com:


By BRADFORD WERNLE, AUTOMOTIVE NEWS




Chrysler rolled out a program this week aimed at solving two of its biggest problems: too many unprofitable dealerships in metro areas and too many duplicate, "badge engineered" products that compete with each other.

The program, called Project Genesis, succeeds Project Alpha, the company's previous dealer consolidation plan, which has put all three brands under one roof in hundreds of locations. Chrysler executives referred to Genesis as "Project Alpha on steroids."

"Genesis incorporates the whole company getting on the same alignment with the same overall strategy," said Chrysler co-President Jim Press in an interview Thursday. "The dealer network component is a piece of an overall plan."

Chrysler wants fewer and more profitable dealers that aren't so close to each other in urban areas. Nearly all of them will sell all three brands under one roof.

"To have the most profit and viability, you have to have all three brands under roof to get the full lineup of Chrysler Corp. everywhere," Press said.

Press said that Genesis sets no timetables or concrete numerical goals for winnowing down the dealer body.

Press also said Chrysler has no firm plans to trim vehicles. He said Chrysler wants to hear what dealers have to say about all aspects of its business plan. Genesis will be the forum under which those issues are resolved.

"We want to be transparent and open about where we will be in the next four to five to six years," Press said.

Chrysler told a series of regional gatherings about the plan this week and will talk about it further at NADA, the annual auto dealers convention.


Moving quickly
Chrysler has already cut several unprofitable products from its lineup. The company won't say whether it will cut more, but it has promised to eliminate duplication.

Dealers who attended meetings where Chrysler discussed the plan last week say Chrysler is particularly concerned about duplication in SUVs, crossovers and cars. Press said Chrysler won't just be cutting models. It also will develop new ones in segments where it doesn't have current entries.

"We are not just dropping products we are realigning and adding new ones," he said.