Chrysler LLC this morning filed a motion with the U.S. Bankruptcy Court in New York cancelling its U.S. dealer agreements with 789 dealers in 49 states. The only state spared was Alaska. If the court approves, and there is no reason to think it won’t, 2,392 Chrysler, Jeep or Dodge dealers will continue with the new company as it emerges from bankruptcy in a global alliance with Fiat.
For owners and prospective customers, this latest development clarifies where to buy or where to get Chrysler products serviced. The 789 terminated dealers accounted for only 14% of Chrysler’s total sales volume.
“This is a difficult day for us, but we’re going forward with the approval of the bankruptcy court,” said vice chairman Jim Press. “There are no winners and no losers. This is the way it is,” said Press, adding Chrysler will now have a “once in lifetime” opportunity to build a powerful dealer network that maximizes dealer franchise value, sales and convenience for customers.
Clearly the losers are the 789 dealers who will no longer be authorized to handle Chrysler products. However, many of them, 44%, were dualed with other makes, or sold more used cars than new cars, creating opportunities for them to remain in business. (more…)