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Chrysler to set up separate Fiat dealer network

07/05/2010

DETROIT — Chrysler Group LLC will set up a separate dealership network to sell cars made by Italy's Fiat Group SpA when they are reintroduced in the U.S. later this year.

The Auburn Hills, Michigan-based automaker said existing Chrysler, Dodge, Jeep and Ram dealers will get a chance to apply to sell the Italian Fiats, but they must be able to operate separate facilities with different sales and service teams in order to win a franchise.

Fiat, which last sold cars in the U.S. in the 1980s, will return to the country in December with the debut of the Fiat 500, a highly efficient, very European-looking small car. Other Fiat models are likely for the U.S., but the company has not made announcements beyond the 500, known in Italy as the Cinquecento.

Fiat was given control of Chrysler by the U.S. government when the automaker emerged from bankruptcy on June 10, 2009. The company would have run out of cash and been sold off in pieces without roughly $15 billion in aid from the U.S. and Canadian governments. While noting that the company still has a long road ahead to recovery, CEO Sergio Marchionne last month touted Chrysler's first-quarter operating profit, two straight months of sales gains and plans for 16 new or updated vehicles by the end of this year.

The Fiat dealerships will be located in roughly 125 U.S. metropolitan areas that Chrysler has found to have high small-car registration and high potential for growth in selling smaller cars, said spokesman Ralph Kisiel. The company expects to have 200 Fiat dealers in 41 states.

Letters will go out Monday to Chrysler Group's roughly 2,300 dealers nationwide giving them general guidelines for applying to become Fiat dealers. More specific requirements will come in application packets for interested dealers.

"Dealers are going to have to demonstrate how they will market, sell and service Fiat vehicles with a new customer service model," Kisiel said.

He would not say if dealers will have to pay to buy a Fiat franchise. Generally, interested dealers must be in the 125 designated markets, meet customer satisfaction and minimum sales requirements, and show that they have the financial resources to support the brand, Chrysler said in a statement.

Dealers outside the 125 identified markets will be considered for Fiat franchises provided they meet all the performance standards and financial requirements, Kisiel said.

Chrysler hopes to announce the dealership network in September, three months before the 500 is to arrive in the U.S. Chrysler also has announced plans for a 500 convertible and an electric version, but no timing has been revealed for those models to go on sale.

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Chrysler Group LLC Begins the Process of Establishing Fiat Dealer Network


AUBURN HILLS, Mich., July 5

* Select group of dealers will be chosen for U.S. Fiat dealer network
* Fiat dealers to be located in markets targeted to the small-car segment
* Fiat dealers will be located in up to 41 states
* Dealers in targeted markets will be sent application guidelines and proposal deadlines this month


Chrysler Group LLC has begun the dealer selection process for the reintroduction of the Fiat brand in the United States.

The Fiat brand in the U.S. will feature the New Fiat 500, which recently celebrated the 53rd anniversary of its introduction in Europe. Dealers will begin selling the iconic Fiat 500 late this year and the Fiat 500 Cabrio in 2011.

Chrysler Group expects to select dealers in about 125 markets identified for growth potential in the small-car segment. Fiat dealers will be located in approximately 41 states.

"The Fiat dealer network will be appropriately sized to serve the market opportunity," said Peter Grady, Vice President of Network Development and Fleet, Chrysler Group LLC. "Our vision is to establish a dealer network that will reflect and enhance the brand's reputation for innovation and fun, and will offer a unique, personalized customer experience."

Chrysler Group will send Dealer Application Guides to dealers in the identified markets containing specific Fiat dealer requirements and instructions on submitting a proposal. The guide presents details on facility, sales strategy, accessory sales, service and parts departments, training curriculum and financial requirements.

Dealers must demonstrate how they will market, sell and service Fiat vehicles with a new customer service model. Basic guidelines include:

* Location – The majority of dealerships will be located in the identified markets.
* Eligible Dealers – Proposals from Chrysler Group's best performing dealers will have preference in the identified markets.
* Dealer Performance – Chrysler Group will evaluate interested dealers on volume performance, minimum sales responsibility accomplishment, capitalization and overall Dealer Standards score. In addition, the company will individually evaluate the proposed facility and customer handling metrics.
* Fiat Facility – A completely separate facility will be required to represent the Fiat brand.
* Fiat Team – A separate Fiat team will be required to sell and service the Fiat brand.
* Fiat Standards – Fiat standards will be unique from existing Chrysler Group Dealer Standards.
* Financial – Dealer candidates will have to show that they have the financial resources necessary to support the introduction of the Fiat brand.


Dealers in the target markets will be invited to attend a meeting in Chrysler Group World Headquarters in Auburn Hills, Mich. Chrysler Group plans to officially announce its U.S. Fiat dealer network locations in September.

SOURCE Chrysler Group LLC
 
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