AUTOMOTIVE INSIGHT: How Chrysler will Cut Back on its Dealers

February 11th, 2008 at 6:03pm

As heard on
WWJ Newsradio 950

Listen to this story:

chryslerdealer.jpgChrysler has come up with a pretty clever plan to cut down on the number of dealers it has.

In the United States, the franchise laws are skewed way in favor of car dealers. It is extremely difficult and legally costly for car companies to try and cut down their number of dealers.

That is likely a key reason why Chrysler plans to combine its three brands at each dealership, and greatly restrict how many models it sells under each brand. After all, if Chrysler, or Dodge or Jeep dealers do not have a full lineup of vehicles, it’s highly unlikely they can succeed. They have to sell all three brands, or get out of the business.

No doubt Chrysler is counting on a bunch of smaller dealers to drop out. That way it doesn’t run into legal problems with the franchise laws. Or, not as many problems. After all, this is America, so you just know they will be sued.

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