Posted by Dale Buss on August 25, 2010 11:30 AM
Look at things from the point of view of a Chrysler dealer, especially if they’ve been in business for a while. They survived the company’s brush with bankruptcy in the late Seventies, the K car, the company’s ill fit under Daimler-Benz, and last year’s bankruptcy, takeover by Fiat, and shakeout of Chrysler’s dealer ranks.
So it’s only natural that some are objecting to Fiat SpA’s plans to establish Fiat as yet a fifth brand in the Chrysler family, joining Chrysler, Jeep, Dodge and Ram trucks. At a time when even General Motors has eliminated some brands, Fiat CEO Sergio Marchionne wants to go the direction of brand proliferation in the U.S. market. Chrysler needs new vehicles but not necessarily a new brand, some analysts believe.
And not only that, it appears Chrysler dealers are going to be asked to invest hundreds of thousands of dollars in separate showrooms – attended by a separate staff — to house the tiny Fiat 500 when the Mexican-made pocket rocket begins appearing in America in December. A convertible version is expected next year and other Fiat vehicles as well under the brand’s re-invasion of the United States.
That whole separate-showroom idea doesn’t have a great recent history. Just ask GM dealers — many of whom are “megadealers” who also own Chrysler-brand outlets – how they feel about their required outlays for distinct Saturn showrooms. Or whether they like having to drive by their separate, shuttered former Hummer dealerships everyday, with the pricey Quonset-hut styling and test tracks.
Marchionne has been trying to sweeten the pot, saying this week in the U.S. that Chrysler dealers who invest in Fiat franchises will also get to sell vehicles from the company’s Alfa Romeo brand, which Fiat has said it plans to freshen. The problem there is that rumors persist about Volkswagen taking Alfa Romeo off Fiat’s hands. And Alfa Romeo stunk up the joint several years ago in the U.S. market when it couldn’t establish mass appeal.
Chrysler dealers are used to uncertainty and stress. And Marchionne is making them feel right at home.