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Cars, dealerships would merge along with GM, Chrysler

9:06 PM EDT, October 30, 2008

The merger being explored by financially ailing General Motors and Chrysler Llc will likely lead to a consolidation of dealers and of models in coming years, with Chrysler and Dodge cars at the top of the list for gradual elimination, industry analysts say.

But, they added, Chrysler, Dodge and Jeep dealers, are likely to remain separate for the foreseeable future from those handling General Motors vehicles. And, as such, they'll have to be supplied with a reasonable range of vehicles to keep them solvent.

Those vehicles could include small cars like the upcoming 2011 Chevrolet Cruze being produced for Dodge dealers by General Motors, or a variation of General Motors full-size pickup trucks produced for Dodge dealers as the Ram, said Rebecca Lindland, director of the autos group in the Lexington, Mass., office of the economic consulting firm IHS Global Insight.

"I don't see the Chrysler Group disappearing," she said.

Further, experts say, Chrysler, Dodge and Jeep owners should not have to worry about parts availability or warranties being honored. "I think GM and Chrysler will stand by their existing product," Lindland said.

At the same time, she and Jessica Caldwell, manager of pricing an analysis for the auto information company, note that the resale value of a model discontinued inherently is lower than one still being produced. "If it's not still out there, it's a much less desirable product," Caldwell said.

The accounting firm Grant Thornton Llp said yesterday the merger might eliminate all but seven of Chrysler's car and truck models, with survivors including the Chrysler and Dodge minivans, some Jeep models and the Ram.

Experts think the minivans will survive because GM no longer makes any. Locally, Chrysler, Jeep and Dodge brands together hold 7.1 percent of the new vehicle market, versus 9.3 percent for General Motors' brands (excluding Saab).

Chrysler's passenger cars are endangered, experts say, in part because GM would dominate the combined company and because Chryslers and Dodges tend not to be as highly regarded or as high in quality as General Motors' newest models. Consumer Reports, for example, last week rated the midsize Chrysler Sebring and Dodge Avenger sedans, the Sebring convertible, Dodge Dakota pickup and the Chrysler Town & Country and Dodge Caravan minivans as among the "worst" in reliability in their respective classes.

"I think a lot of Chrysler vehicles - most specifically car models, are likely to go by the board," said Jack Nerad, executive editorial director and market analyst for the Irvine, Calif.-based auto information company Kelley Blue Book.

Cars, dealerships would merge along with GM, Chrysler --

Well this sounds a little more encouraging, but again who know for sure what will really happen!
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