Chrysler Cuts Dealerships

June 12, 2008
Even before the current slump in car sales, it was conventional wisdom that the Big Three U.S. automakers were "over-dealered." In some cases, they operated two, even three times as many as their import rivals when you adjusted for overall sales. Once, that was considered a real advantage, giving Detroit more coverage, but no longer.

General Motors began trimming back its showroom count more than a decade ago, often to sharp resistance from the smaller retailers who were typically the first to go. Now Chrysler is stepping up its own dealer consolidation program, eliminating 196 outlets, or roughly 5 percent of its total during the last 12 months.

The pressure is increasing, both on Chrysler and its retailers. With the overall American car market slipping and Chrysler's own share plunging even faster, it's becoming harder and harder for marginal outlets to stay in business. And the automaker is pressing even some of its healthier dealer to consider selling out.

Part of the campaign is to consolidate showrooms that continue to sell only one or two of the automaker's three brands - Chrysler, Dodge and Jeep - into single, so-called Genesis shops. Thirty-seven of these all-brand showrooms have opened since the beginning of the year, and today, Genesis retailers account for 58 percent of Chrysler's 3,488 remaining retailers.

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