Chrysler investing in dealer network to improve operations

Article by Christian Andrei, on August 29, 2010

Chrysler Group wants all dealerships to sell Chrysler, Dodge, Jeep and Ram by the end of 2011. This directive means that dealers will require lots of capital in the coming years to improve operations and so Chrysler will be extending help.

Where there are more brands, there would have to be new or bigger showrooms, more capable service departments, different signs and more employees.

Currently, 80% of Chrysler's 2,366 dealerships sell all three brands under the automaker's consolidation program, Project Genesis.

Peter Grady, vice president of dealer network development, confirmed that the company plans to invest over $500 million in the network over the next five years -- $120 million for next year alone.

Kathy Graham, a Chrysler spokeswoman, says that the bulk of the money will go for "real estate, training, infrastructure upgrades and technology upgrades."

Dealers have been unable to improve stores due to the sales collapse this year and the fact that many dealers continue to struggle to get adequate financing for operations.

About 140 Chrysler Group dealerships have not been approved for permanent floorplan financing because of lingering issues with Chrysler Financial, Grady said.

In many unresolved cases, Chrysler Financial wants loan money repaid before it releases the lending relationship to GMAC Financial Services. GMAC, the traditional lender to General Motors Co. dealers and customers, is taking over the auto loan business of Chrysler Group.

Topics: chrysler, investment

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