Chrysler Opening Its Service Bays To Other Brands

April 14, 2011

The operation might need a name change, but the signal is clear: Chrysler is getting serious about the aftermarket auto-parts business. Through a new agreement, dealers will have access to over 3,000 part numbers that will fix 85 percent of the cars now on the road, not just those made by Chrysler.

According to The Wall Street Journal, Fiat S.p.A will be making parts available this month to their American Chrysler dealerships via their Magneti Marelli division.

This is a break from normal business practice: when a Chrysler dealership was servicing a Ford in the past, it would call stores like NAPA or AutoZone for parts. Now the Chrysler dealers will have the Magneti Marelli line to draw from, which will improve productivity and prop up Fiat earnings.

Chrysler's plans include selling to independents as well. The concept of selling parts fitting more than just the house brand is called "all makes, all models" and has been tried by Ford's Motorcraft and General Motor's Goodwrench operations with limited success, mostly due to slow delivery and limited coverage.

Shops want to know that, when they make a call for parts, that there is good chance the parts store will have them in stock. So it will be interesting to see if Chrysler can pull it off.

The rest of the company's plans, as described in the Journal, may not sit well with the independent repair facilities that Chrysler wants to attract as parts customers. By 2014 the company would like to raise the percentage of dealerships offering express oil change lanes from the current 26 percent to 80 percent. Chrysler has struck a deal with Royal Dutch Shell PLC's Shell Lubricants in hopes of tapping into their expertise in running the fast-oil-change business.

The move will put dealers in direct competition with independent shops.

Fiat's share in Chrysler has risen to 30 percent from the original 20 percent, a milestone that was only possible because the car maker has satisfied U.S. government goals for sales and revenue. The next hurdle is to build a fuel efficient-car based on Fiat technology at which time the Italian company can add another 5 percent.

According to the WSJ, Fiat is pleased with the opportunities that the Chrysler acquisition has afforded and may wish to go beyond the U.S. government's outline for ownership.

[Wall Street Journal]     

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