AUTOMOTIVE INSIGHT: Chrysler Dealers Wary of Shrinkage Plan

February 28th, 2008 at 9:00am

As heard on
WWJ Newsradio 950

Listen to this story:

Chrysler Shrinking

Chrysler’s dealers are very wary of the company’s plans to reduce the number of dealers it has. Here’s how they want the company to act.

Chrysler’s dealers agree the company needs to cut down the number of dealers it has. They just want it to happen quickly, and that is going to cost the company money.

The dealers warn that if Chrysler just tries to drive some dealers out of business by limiting the number of models they can sell, the transition is going to be long and drawn out. And that would hurt the company, not just the dealers.

Instead, the dealers say they want to be compensated for leaving the business. But they also point out it doesn’t have to be one big lump sum payment. They’d be willing to take a note from Chrysler that promises to pay them off over time.

 

One Comment to “AUTOMOTIVE INSIGHT: Chrysler Dealers Wary of Shrinkage Plan”

  1. Tom Martin Says:

    I understand why limiting the number of dealers benefits the dealers that remain. However, I don’t understand why it benefits Chrysler to limit the number of dealers.

    For example, if I built a sailboat, I’ll probably sell more sailboats if 1000 dealers sell my sailboat rather than 500. Why would I pay money to pay for 500 dealers to stop selling my boat?