Fiat News: Dealers Are None Too Happy With FCA's Expansion Plans

[William Maley]

From the 'how does this make sense' file, Fiat Chrysler Automobile is planning to expand its dealer network in the U.S. by adding around 380 new dealers. This news first came to light last week as Automotive News learned from two dealers and a source at FCA about the plans. The goal of this expansion is to try and expand market share. But there are a number of issues. For one, FCA has been seeing its sales and market share drop in the past few months due to a thinner product lineup.

Second, some of the locations that FCA is planning to put new stores are within a few miles of existing stores. For example, two dealers in Louisana have filed protests with Louisiana Motor Vehicle Commission for a proposed dealer in Kenner, LA. One of the dealers notes in their protest that the location is less than five miles from where they are. As they say in their protest, "will either be closer to Bergeron or, worse, must drive by Bergeron, if they are going to do business with the new point." A number of dealers in Texas have also filed complaints on new dealerships in their respective areas.

Finally, an internal FCA source tells Automotive News that the company's dealership location consultant, Urban Science doesn't agree with the expansion plans. The data from the consultant "does not support these additional points."

Fiat Chrysler Automobiles and Urban Sciences were unable to comment.

Source: Automotive News (Subscription Required), 2

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[David]

More of Sergio Stupidity. This will hurt and just proves Sergio is an idiot as he has not learned from the other auto makers that more dealers is not always good.

Sergio is only looking at how can we move more metal onto other peoples lots to show we are bigger. not about success of the existing company.

I could go down so many ways this is poor business planning and management, but I think most of the intelligent folks here also see this is suicide. 

[FordCosworth]

Thin lineup, losing market share and your own consultants are saying no...

 

 

 

 

[hyperv6]

Right now it is not the number of dealers but often the locations. While GM, Ford, Honda and Toyota have spent a lot of time updating dealers and helping many relocate to near interstates many of the Jeep and Chrysler dealers have not updated.

Also they like the other American MFG's  often have too many dealers.

Many dealers are also not happy with the income or the lack of income from Fiat dealers they were encouraged to take in.

Lets see the hands here and how many people are ready to go out and by an Alfa after all the money that was spent last nigh on the Super Bowl.

While I find the new Alfa an interesting car and though I have yet to drive one it appears to be a very fun car to drive. But for that money there are many cheaper and more safe choices over the questionable quality of the brand.

Alfa like any other brand that has been damaged needs to re earn the trust of the public and a high priced car like this is not the way to do it. Also the many recalls the corporation does not instill trust.

Now I see Sergio wants to sell stock on the F1 team at Ferrari. If he is not gone soon he will bring this all down.

I am just shocked he did not say he was going to merge with GM again so they can have more dealers?

It is not too late to save Dodge and Chrysler but it needs to be done now and be done on their own platforms not Fiat and Alfa.

[smk4565]

They should build 380 Alfa Romeo dealerships.  They spent like $6 million last night advertising a car that won't sell.  The Guilia I'm sure is a good car, it gets good reviews, I just don't see them selling them in mass quantity to justify the cost to develop it and market it and distribute it.

[daves87rs]

Dead brands walking.....

[surreal1272]

I believe it is high time to take FCA out back and bury it deep in the ground with a shovel and Lyme. There is nothing from them that needs saving here (speaking of Fiat and Alfa in general, not Dodge, Jeep, RAM, and Chrysler).

[Stew]

THis is not the best idea, that is for sure.  IMHO, Get the Fiat brands into existing Chrysler/Dodge/Jeep dealerships you have now.  Make sure Alfa is accessible.  An interesting tidbit is that FCA was within 400 retail sales of Ford last month so all the direness is not as bad as it seems.  I am thinking the belief has to do with the fact that once the factory expansions are done they will finally be able to provide enough Wranglers and Ram pickups, no to mention the fact the Wrangler pickup will be ho right out of the gate.  I do know that Chrysler dealerships are rare here so this one location i can see adding one maybe 2.  380 is WAY optimistic though. 

[David]

28 minutes ago, surreal1272 said:

I believe it is high time to take FCA out back and bury it deep in the ground with a shovel and Lyme. There is nothing from them that needs saving here (speaking of Fiat and Alfa in general, not Dodge, Jeep, RAM, and Chrysler).

I agree with what you say, but am thinking it might be time to reitre Chrysler with their single minivan. Move it to Dodge and focus on Dodge, Ram Jeep. If you want to keep Chrysler, then time to return to the history of Chrysler as a luxury brand above dodge.

[smk4565]

If Sergio really wants to merge with someone he should consolidate brands.  The reason no one will merge with them is Jeep is all that the other car companies want.  These rest actually makes them less attractive to a Honda, Toyota, Ford etc to buy.  And more dealers doesn't make them look like a better buy either.

[Suaviloquent]

I'm sure things are not as bad as they seem though. But I've seen this kind of frivolity before. Even the idea of conflict within the company and its contractors or partners, should be a signal....I don't check FCA stock price, but... I think secretly....investors are going with Sergio. If I was stuck deep like this, this kind of frivolity to offload brands you do not want to keep....it might be a consideration.

My first, and best instinct here is that Sergio wants all FCA US LCC brands to tank, and some domestic or foreign automaker to bail them out and take that responsibility off of Fiat's hands by buying them cheap. It's better at this point I think to sell the American brands that are not strong....like Chrylser or Dodge for cheap...than to keep them and fill their product starved lineup. 

He wants to offload the American brands, spend as little as possible for them, and probably try to make Fiat, just Fiat brands, the Italian ones, Alfa, Maserati....like the equivalent of Buick and GMC in terms of differentiation but fit in brand family, but same platforms and shared components. Ferrari then becomes their Cadillac. And Fiat brand continues to be the awful Fiat brand.

I think remaking the Chrysler vans into Pacifica was a decent enough choice, but given that almost all of the fresh product after seems to be some kind of performance variant of an exisitng cars or trucks....

Jeep got a new Compass...but like, I don't understand any appeal for it other than the badge and getting the trailhawk. Every other crossover will do crossover things better, for probably a lower price too. Here is an example of branding.....for the availability of Trailhawk, every crossover that is FWD based from Jeep makes a lot of compromises, or uses the 2.4 Tigershark. The Grand Cherokee and Wrangler are untouchable, THEY ARE THE TRUE JEEP, and JEEP AT IT'S BEST. The rest of the Jeep's their trailhawk versions is like almost to me....like an off-road themed version of how Mercedes made an AMG for the CLA and GLA and Audi has the S3...SQ3 planned too....you see where I'm going? Yes, they are Jeeps and they sell.

Capitalizing on brand value, it's just that easy. Build a brand, and whore it out! That's how it works, as much as no one seems to go after Jeep for doing so. But Jeep has a unique selling proposition. There's nothing like a Jeep, and even the compromised products still have enough Jeep quirks to be able to fit within the lineup. And THEY DID a very smart thing to have every Jeep model to have it's own character, own version of a malleable design. Because that's the same as how the Grand Cherokee and the Wrangler, are so different in appearance...and at some level, function. Even the Commander was not a LWB GC....

 

Anyways, yeah.