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August 31, 2010

Fiat dealers may get Alfas, too

Chrysler to have 6 mainstream brands

Chrysler dealers might get a shot at selling as many as five Alfa Romeo models, beginning in late 2012, if they are lucky enough to be chosen as one of 160 Fiat dealers to sell the tiny 500 city car, beginning late this year, according to dealers who attended a presentation Monday at the Detroit Institute of Arts.

About 400 dealers attended the event. Chrysler's proliferation of brands runs counter to the fewer-brands-are-better strategies of rivals Ford and General Motors, both of which capture more U.S. sales than Chrysler. The Auburn Hills-based automaker now has four brands: Chrysler, Dodge, Jeep and Ram, which became a new brand last year.

Fiat, which owns a 20% stake in Chrysler that is expected to grow, already sells a small number of uber-luxury Maserati and Ferrari cars in the U.S., but will bring more mainstream Fiat and Alfa Romeo models, too.

That will give the Chrysler-Fiat duo six mainstream brands in the U.S. Unlike Chrysler's four brands, which eventually are to be sold under one roof, Chrysler dealers seeking franchises for the Fiat brands must find separate locations.

Only two or three of the initial Fiat dealers will be in Michigan, according to a map exhibited Monday.

Chrysler doesn't plan to announce Fiat 500 pricing until November, but one dealer who has talked with company officials said the city car will be priced between $16,000 and $19,000. Sales of minicars like the Toyota Yaris, Honda Fit, Chevrolet Aveo and Ford Fiesta make up only about 5% of U.S. car sales but have generally been growing.

Dealers wanting to sell the first Fiat to be offered in the U.S. in about 30 years must submit business plans by Sept. 22. Chrysler plans to award the Fiat franchises by late October, said dealers who attended the event.

The cost of a separate showroom and the modest revenue from one small car present a risky business proposition to dealers, who, like most small-business owners, have seen their access to credit restricted since the financial meltdown of 2008. Chrysler also terminated 25% of its U.S. dealers as part of its bankruptcy restructuring.

LINK: Fiat dealers may get Alfas, too | | Detroit Free Press
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