By on August 21, 2007

dome-1.jpgAside from select Jeeps, Chrysler's sales suck. Given this inescapable fact, you'd think that the hard-pressed born-again domestic automaker would do everything in its power to keep the folks on the American front lines happy. After the sales bank debacle, after brazen "channel stuffing" (forcing dealers to take cars), after barring "under performing" Chrysler dealers from the company's life-sustaining used car auctions, after sending these dealers letters threatening to shut them down, you'd think Chrysler's corporate clowns would have run out of ways to alienate the troops. Wait! Here's a new one: exclude some dealers from the corporate Internet sales funnel. Way.

Automotive News discovered the Crisis Corporation's Internet shenanigans by searching online for Chrysler dealers within a specific zip code. They got a list of all the dealers in that area. When they clicked on the name of one of the dealers, they either did or didn't get transferred to the dealer's website. A decision made at the top level prevented some (if not most) dealers benefiting from leads generated (or now not) by the company's all-singing, all-dancing brand-specific websites.

Chrysler, Dodge or Jeep dealers who don't have the corporate "Five Star" dealer rating (Chrysler pentastar, geddit?) get screwed. If you select a Five Star dealer, you can request a quote, search inventory, schedule a test drive or set up a service appointment. If the chosen dealer didn't quality for the five-star designation, you get a message to call or visit the dealership. End of story.

What makes a Five Star dealership worthy of such consideration? According to www.fivestar.com, Five Star dealers must meet "specific requirements set by DaimlerChrysler." They have "strict facility requirements [so] you can expect a clean and pleasant place to shop for a vehicle or have your vehicle serviced" and employ "consistent, proven processes focused on satisfying every customer every time." 

Even better, they're staffed with "sales professionals [who] are product experts trained to make sure you find the vehicle that best suits your needs [and] service and parts professionals… trained by DaimlerChrysler to properly diagnose your vehicle, repair it right the first time, and get you back on the road quickly." At this automotive nirvana, "employees work together as a team to ensure that, once you purchase a vehicle from them, you have a seamless ownership experience that can only be called Five Star."

If you stop to think about it, a dealer answering to the above description is kinda what a customer has a right to expect from a "normal" car dealer. Chrysler's Five Star folk are only doing what any well-managed, customer-focused dealership should be doing. In that sense, maybe Chrysler's right to cut out its non-Five Star dealers from the cyber-loop. Of course, Chrysler dealers who don't have the Five Star rating don't quite see it that way. 

B.J. Brickle runs both a Chrysler-Jeep dealership and a Nissan franchise in South Carolina. Customers can access his Nissan inventory via Nissan's on-line services. Not so his Chrysler product. "I have a guy just handling Internet leads [at the Nissan dealership]. If you respond to me on the Internet, I'm back to you in an hour. With Chrysler, I don't have that option."

Chrysler's e-favoritism is a classic case of rhinectomy for facial spite. In areas where there are no Five Star dealers, customers looking for local inventory are denied a peek at Chrysler stock– unless a dealer with fewer than five stars wants to bear the expense of listing their inventory on their own site. Even if they do, the vehicles aren't accessible from the corporate mothership's site, where many buyers begin their car-buying adventure. 

In typical Big Three Kremlin style, Chrysler says it's "studying" the problem. They say the selective electronic referrals are designed to reward Five Star dealers and encourage lesser stores to work toward certification. "We're re-evaluating all elements of the Five Star program and hope to have a resolution soon," said spokesperson Lidia Cuthbertson. 

This is beyond nuts. With precious few exceptions, Chrysler's sales are down across the board, with no immediate prospects of resurrection. At best, the company has a truck-heavy, mediocre lineup. While you can certainly understand Chrysler's general desire to trim its bloated dealer network, there are dignified ways to go about it (e.g. Chapter 11). Now is not the time to demoralize dealers struggling to put food on their table and, by extension, Chrysler's.   

One thing's for sure: Chrysler needs to stop "re-evaluating" their web policies and understand the number one rule in sales: make it easy to buy. Stupid moves like this serve no useful purpose. The two-tier internet strategy pits dealer against dealer, and dealers against the company. It may not violate the letter of their franchise agreement, but it annihilates the spirit.

New owners or no, Chrysler still seems Hell-bent on self-annihilation.

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64 Comments on “Chrysler Suicide Watch 22: A Tangled Web...”


  • avatar
    SherbornSean

    The dealers which are rated 5-star are the ones that did the best job of bribing/ threatening/ cajoling car buyers into filling out the survey positively. It goes a little like this:

    “Now let me explain to you what’s going to happen. You’re going to get a survey from Corporate Headquarters, and they’re going to ask you a lot of questions. Please, please, PLEASE, answer everything as the ‘most satisfied.’

    If you don’t, then — see this picture of my kids? — they don’t eat. You get me? Also, when we find out it was you who didn’t give us 100% ‘most satisfied’ then when you come in for service, let’s just say the mechanics will make a few, uhh, ‘adjustments.’ You know what I mean?”

  • avatar
    quasimondo

    The beatings will continue until morale improves.

  • avatar
    ilovemangoes

    I’m going to take the liberty of going slightly off topic. Please forgive me.

    “Chrysler needs to stop “re-evaluating” their web policies and understand the number one rule in sales: make it easy to buy.”

    Exactly. I am in the market for a new vehicle, I like the Dodge Magnum and my wife really likes the Chrysler Pacifica (we need a car for two kids and a dog). Prices here in Canada for either of these vehicles are $10,000 to $14,000 higher than if we bought them in the States. There is no good reason, that’s just the way it is. The same goes for GM and Ford made vehicles.

    So I call Chrysler and ask them what happens if I buy a new or used Chrysler or Dodge in the US and bring it back here. They tell me that the warranty will be voided, in both countries. Same goes for GM and Ford as well.

    So I ask them why that is, and they say it is just the rules. It more likely has something to do with dealer rules and cross border shopping.

    What I fail to understand is why they wouldn’t honour the warranty, if they did at least the dealers here would get the service work from me. With the warranty voided, I’m going to an indie mechanic.

    I CAN go to the States and buy a Mazda, Toyota or Nissan and have full warranty protection when I register the car here but I can’t do that for any vehicles made by the Big 2.8 (ironically, both the Magnum and the Pacifica are made here in Canada, maybe even by our friend mikey).

    So to re-cap, I WANT to buy an American (Canadian) made vehicle (yes, I like Dodge’s and want to buy American and no, I don’t smoke crack), yet none of the big 2.8 want to sell me one at a reasonable price. I’m supposed to bend over and enjoy my special Canadian pricing just for the hounour of owning one of their fine products. Or I can do the same but by a transplant and enjoy all the benefits of new car ownership.

    WTF is going on? I thought these guys wanted to sell cars.

    P.S. NA Car makers were among the biggest proponents of NAFTA and they reap the rewards of this agreement, yet they make it next to impossible for their customers to enjoy the exact same benefits they do (crossing the border with a duty free product). What on earth is going on?

  • avatar

    ilovemangoes: Actually, you didn’t stray off-topic; it is the Chryslerberus DW, after all. It appears that Mazda, Toyota and Nissan want your business more than Chrysler; surely you can find something in the lineup from these three which will satisfy your need to carry two kids and a dog. The Mazda CX-9, Toyota Highlander and Nissan Murano all come to mind.

    That way when Cerberus sells off all of the Chrysler assets after the Chapter 11 filing, your warranty will still mean something. Or think of it this way, they’re helping you out!

  • avatar
    Redbarchetta

    If the Chrysler/Dodge dealer where I live is any indication non of these “tacktics” are bringing in buyers. The radio ads scream of despiration, touting them as the best products in the area with 0% financing for 72 months, $1500 incentive and some other freebie. The lot is a ghost town when I drive by in the morning and evenings.

    I completely don’t understand how this is helping there cause. They have an over abundance of cars no one wants and they only way to sell them is through DEALERS. If they reduce there plethora of dealers right now, how will they get rid of all that useless metal, it’s not like you can buy directly from the factory and cut out the middle man(dealer).

  • avatar
    Pch101

    So I call Chrysler and ask them what happens if I buy a new or used Chrysler or Dodge in the US and bring it back here. They tell me that the warranty will be voided, in both countries. Same goes for GM and Ford as well.

    Those policies are in place to protect dealers in Canada, who generally are selling cars at higher prices than their American counterparts. Importing US cars into Canada is generally fairly easy and most Canadians live within a few hours of the border, so many Canadian dealers would be put out of business if the warranties were honored.

    It’s not just the domestics who have such policies. Honda, for one, won’t let you just buy a car in the US and immediately import it to Canada with a warranty in place. You have to go through hoops which establish that you were a legitimate resident of the country in which you bought the car and are subsequently relocating in order to maintain the warranty coverage.

  • avatar
    ilovemangoes

    edgett

    Actually, I really like the CX-9 and I also like the Infiniti FX35. Nothing Toyota makes has any soul…

    I was hoping to purchase a domestic vehicle. I would prefer to buy products made here. Our economy is dependent on folks here having good jobs. No, I am not a closet communist, infact far from it. That’s how I was brought up. But there does come a time when that philosophy doesn’t make sense and the big three, especially Chrysler, are getting me there in short order.

    For S&G’s I wrote a letter to Nardelli and LaSorda asking them why they didn’t want me to buy a car in the States. I will post their reply, if I ever get one.

  • avatar
    GS650G

    Shades of Glengarry Glen Ross.

  • avatar
    ilovemangoes

    pch101

    I have spoken with reps from each of the big 2.8 as well as Hyundai, Honda, Mazda and Toyota.

    Honda is the only foreign car maker that wants me to jump through their hoops. At least they can afford to lose the sale.

  • avatar
    Redbarchetta

    Why are prices so much higher in Canada? Is it a tax, the dealers charging more, or something else?

  • avatar
    Pch101

    I completely don’t understand how this is helping there cause. They have an over abundance of cars no one wants and they only way to sell them is through DEALERS. If they reduce there plethora of dealers right now, how will they get rid of all that useless metal, it’s not like you can buy directly from the factory and cut out the middle man(dealer).

    The small dealerships cost them money over the long run, as they have to spend money and effort on administering those relationships, including the cost of carrying the financing that those dealers require while they hold inventory. Their goal is to streamline the dealer network so that it is centered on superstores that can move large batches of inventory quickly, which saves the parent company money and allows more metal to get shoved out the door.

    Whether the current inventory proves to be unprofitable isn’t Cerberus’ problem, as it didn’t really pay for it — Daimler already took the hit. What’s more important for Cerberus is dealing with the bigger picture problem, which requires them to cut the fat, starting yesterday.

  • avatar

    With regard to Warranty on Chrysler vehicles, you could always get a good Warranty from a Third party like Lubrico, its one of the best available, wanting to purchase a vehicle made here in Canada is okay but dont forget all these US Companies are foreign companies and all the profits got back to the USA .If you decide on a Pacifica be aware that its a Gas hog, also Insurance in Ontario is more expensive than others and parts are hard to find, one of my customers had one and had to sell it as the cost of gasoline was terrible, to my mind a Toyota Highlander is a better vehicle, I know it can carry Dogs too as I am a Dog Breeder of Labradors in my spare time.

  • avatar
    jurisb

    chrysler must understand that if they made fine products, they could sell them even near a dumpster with sales clerks shouting saliva in your face. it is about a good product, that makes people find the place and fish the car out. you can service your clients with a Paganini violin playing to their ears, what they need,actually, is the music of a good car, not a good wrapping paper. YOU ARE TRYING TO DO A GOOD BOOKKEEPING FOR A HALF ROTTEN GROCERY STORE.
    concentrate on products, on the physical statistics of each vehicle, not the bowtie of a undergraduate salesclerk.
    Ask yourslef why there isn`t a single new platform made by chrysler itself , not what dealers should qualify for pentastar. you see, a dealers lot for a client is a10 minute experience, while the car he is going to buy- at least a 5 year adventure. address the tumour( chronical lack of quality and diversity of modern in-house built, non-cloned american vehicles), not the make up to cover it.

  • avatar
    Pch101

    I have spoken with reps from each of the big 2.8 as well as Hyundai, Honda, Mazda and Toyota. Honda is the only foreign car maker that wants me to jump through their hoops. At least they can afford to lose the sale.

    I would double- and triple-check that. For example, these two somewhat contradictory statements are from Toyota’s US website (on the very same page, no less!):

    If you are moving with your vehicle to U.S. territories, Canada or Mexico, then your vehicle’s existing New Vehicle Limited Warranty should be honored.

    followed by

    If you are interested in purchasing a Toyota vehicle to operate outside of the U.S., Toyota recommends you contact the Toyota authorized distributor in the country in which you intend to operate the vehicle to assist you in locating a local dealer. Toyota dealerships in the U.S. and Alaska are not authorized to sell Toyota Motor vehicles for resale or use outside the United States.

  • avatar
    SherbornSean

    When you interview for jobs with managment consulting companies, they give you a case interview, which is typically an example of work the interviewer has done for a client, to test whether you think like they do.

    One consultancy I interviewed with out of B-school used Oldsmobile as their case interview. (Am I dating myself?) Anyhow, the idea was to figure out how to improve sales without changing the product line.

    My solution was to focus on the small town dealers, thinking they had strong relationships to the community, were relatively honest, and could retain some margin and service revenues to survive, until competitive product was brought to market.

    I bombed the interview, because the consultancy had in fact recommended the opposite. They directed Olds to focus on the volume dealers and forget about the small, local dealers. Move the metal, regardless of price.

    I wonder if that strategy will work as well for Chrysler as it did for Oldsmobile.

  • avatar
    Redbarchetta

    PCH I understand there need to consolidate there dealer network, I completely agree with that. The way they are doing that I don’t agree with.

    I forgot to mention an important fact about that dealer near me, it is one of those newly consolidate super-dealers. They just moved to this brand new site 6 months ago. Size doesn’t matter if you have an ocean of that just sit there because no one is buying them.

  • avatar
    Pch101

    My solution was to focus on the small town dealers, thinking they had strong relationships to the community, were relatively honest, and could retain some margin and service revenues to survive, until competitive product was brought to market.

    I bombed the interview, because the consultancy had in fact recommended the opposite. They directed Olds to focus on the volume dealers and forget about the small, local dealers. Move the metal, regardless of price.

    The problem for the manufacturer is that the margins to which you refer are the dealer’s margins, not the automaker’s. If the dealer sells the car for less than invoice, the automaker makes the same margin as it would if the dealer sold it for full sticker + ADM.

    Dealers generally finance their inventory, often from the manufacturer at a relatively low rate, such as prime. The longer that a dealer needs to sell a car, the longer that the manufacturer carries that loan.

    The manufacturer would much prefer that the dealer generate volume. The successful mainstream automakers in the US, such as Toyota and Honda, have relatively small dealer networks compared to the Big 2.8. It is better for all involved, because the dealers are more profitable (the higher volumes make them more profitable, even if margins in percentage terms are relatively modest), which makes them better customers to the automaker that gets to sell them more inventory. Inventory management is critical to the automaking business, as unsold inventory is very costly to carry, and any successful large automaker has to have a solid plan for moving it as fast as possible.

    In the car biz, automakers of mainstream brands want market share, and larger volume dealerships are a better way to get that share. The consultancy was right, but GM’s dealer consolidation plan has been slow to implement, and Olds was a dead brand worth killing, anyway.

  • avatar
    Johnny Canada

    @GS650G

    Glengarry Glen Ross. Awesome reference.

    Coffee is for closers.

  • avatar
    Dave Ruddell

    Why are prices so much higher in Canada? Is it a tax, the dealers charging more, or something else?

    I’m pretty sure it’s the rapidly rising Canadian Dollar. About 5-6 years ago, when $1CDN was worth about 0.62USD, cars were cheaper up here when the exchange rate was factored in. Now that it’s moved up to about 0.95USD, the siutuation is reversed. This price disparity is not just for cars; books are liek this as well. If the loonie stays at this level for some time, I would expect the prices to even out.

  • avatar

    SherbornSean “The dealers which are rated 5-star are the ones that did the best job of bribing/ threatening/ cajoling car buyers into filling out the survey positively. It goes a little like this….You’re going to get a survey from Corporate Headquarters, and they’re going to ask you a lot of questions. Please, please, PLEASE, answer everything as the ‘most satisfied.”

    I have a Scion and my local dealer played that game too. Everytime I got my car serviced they would go through that routine. I played too because frankly the service was excellent except for that annoying please rate us excellent spiel. They even followed up with a phone call reminding me to give them an excellent score.

    I finally started writing in the surveys that their practice of beggging etc for excellent scores was causing me extreme discomfort and disatisfaction. I did the same with Scion’s online survey and with Mike Karesh’s site. Its amazing I no longer get harrassed about giving them good marks after I get my car serviced now .

  • avatar

    I would double- and triple-check that. For example, these two somewhat contradictory statements are from Toyota’s US website (on the very same page, no less!):

    In my interpretation these are two different things. The first is if you own it and are moving, the second is to buy with the idea of using it elsewhere. Or am I wrong?

    John

  • avatar
    SherbornSean

    Pch101,
    I agree with you that dealer margins are much less important to automakers than their own. That said, the crux of my idea was that there was no way Oldsmobile was going to compete with Toyota and Honda at the largest dealers on the “automile” in big city suburbia.

    I would argue that a better strategy for Olds (or Chrysler) is to focus on the small towns where the competition is less keen and where people don’t mind paying a little more to be treated with respect and honesty.

    The model is Ace True Value vs. Home Depot, or Radio Shack vs. Best Buy.

  • avatar
    William C Montgomery

    Five Star dealers must meet “specific requirements set by DaimlerChrysler.” They have “strict facility requirements [so] you can expect a clean and pleasant place to shop for a vehicle or have your vehicle serviced” and employ “consistent, proven processes focused on satisfying every customer every time.”

    Funny, the local Five Star dealer in Lewisville, Texas is a den of thieves that bilk their customers with overpriced parts and service. They recently charged me $24 per quart for synthetic gear oil. I returned the overpriced Mopar oil after finding Mobil 1 Synthetic gear oil at O’Riley Auto Parts for $7.50.

    Additionally, the Fiver Star web site allows customers to make service appointments so you don’t have to drop your car off for hours or days before anyone looks at it. Fat chance.

    I made an appointment for a 45 minute recall repair on my emissions. I showed up at the scheduled time and was told they could begin working on the car at 3pm (7 hours later). I would have felt better if the service rep would have laughed at me and said, “You thought you could make an appointment for a repair and actually thought we would honor it? HA HA HA! What turnip truck did you fall off?” Instead he just glared at me with palpable contempt.

    What wonderful service. No wonder the company is in such great shape.

  • avatar
    Pch101

    In my interpretation these are two different things. The first is if you own it and are moving, the second is to buy with the idea of using it elsewhere. Or am I wrong?

    You’re probably right; however, the message is still ambiguous, given the lack of caveats provided in the first quoted excerpt. I guess that it comes down to what the definition of “moving” is.

    The point here is to read the warranty’s fine print for yourself, and to not make the decision based upon what somebody tells you. It is not unusual for US-market products to carry no warranty in Canada, even if they are essentially identical goods.

  • avatar
    Pch101

    That said, the crux of my idea was that there was no way Oldsmobile was going to compete with Toyota and Honda at the largest dealers on the “automile” in big city suburbia….The model is Ace True Value vs. Home Depot, or Radio Shack vs. Best Buy.

    I would suggest that the problem with this is that the inventory carry costs are far too high in the auto business for this strategy to work for a mainstream maker, particularly one such as GM that is so horrendous at inventory management. GM already has inventory turn times that are substantially longer than Honda, Toyota, etc..

    Of course, the Big 2.8 should do a better job of managing inventories at the assembly line level, but old habits are hard to break. Henry Ford invented the channel stuffing model for the automaking business, and they seem unwilling to change it.

  • avatar
    Claude Dickson

    This IS off topic, but Alec Baldwin deserved an academy award for that one scene. Brief, but very intense

  • avatar
    SherbornSean

    PCH101,
    We’re a little off topic, perhaps, but I’ll argue the point further. The Big 3 inventory issues are a direct result of the sales strategy — dump as much as is produced on the biggest dealers, and then throw cash on the hood until it sells.

    Contrast this to a small dealership with minimal inventory — essentially only enough to give test drives and satisfy customers who must get their car immediately. Receive vehicles from the factory (or regional inventory storage) when customers actually order them.

  • avatar
    Pch101

    The Big 3 inventory issues are a direct result of the sales strategy — dump as much as is produced on the biggest dealers, and then throw cash on the hood until it sells.

    I differ with that. It’s the byproduct of the production strategy, but it’s an archaic model that doesn’t work in a competitive market.

    Back in the day when Ford led the market, his assembly lines were operated to crank out volume. The higher the volume, the lower his per-unit costs became, because the cost of the plant and equipment, labor, management and marketing could be amortized over more units. Also, selling more cars creates a positive feedback loop of market share and customer loyalty that leads to future sales.

    At the time, Ford imposed monopoly/ no-compete clauses in his franchise agreements. A dealer could only sell Ford products. This gave Ford leverage to force inventories onto the dealers, as they could lose their franchises and their entire businesses if they did not comply. This way, Ford could run his lines constantly, without regard for the timing of the vehicles’ retail sale. They would sell eventually, and it was the dealers’ problem to figure out how to move them and to carry the cost of holding them in the interim.

    Since then, the market has become far more competitive, and court decisions have since barred manufacturers from forcing no-compete clauses onto dealers. The combination of these two factors has made it difficult to maintain the old Ford model of build-’em-and-dump-’em, but instead of fixing it with JIT systems and flexible lines, the Big 2.8 instead resorted to incentives and giveaways.

    The root of the problem goes back to how they build cars and what they choose to build. The incentives are just a symptom of what is truly wrong. If the lines were more flexible, and more importantly, if the lines produced vehicles that consumers actually wanted, excess inventories would be an occasional hiccup and not something to worry much about. But decades of incompetent management have led them to this abyss, and it will be hard to turn this, at least with their US sales.

    By the way, I would say that it is very much on topic, as this inventory management issue is a critical part of the business. These discussions help to shine a light on what is behind all of this in the first place, the type of depth that isn’t found in your typical buff book or local newspaper.

  • avatar
    Dave M.

    I truly feel sorry for any Chryco salesperson. With the exception of an elongated glance at a PT Cruiser convertible (horribly cheap interior), those poor folks sell absolutely nothing that interests me as a consumer.

    I can’t imagine trying to make a career, or even feed a family under those conditions, and now especially if the corporate overlords construct further barriers to making a living.

    I see Chryco broken up and sold off within 3 years if not sooner.

  • avatar
    windswords

    Not all dealers are upset about this. From the Automotive News story: Five Star dealers don’t necessarily agree. John Schenden, owner of Denver Pro Chrysler-Jeep in Denver, says dealers who put forth the effort and expense to achieve Five Star status should get added benefits, including the extra Internet sales tools. “They’ve had nine years to meet the minimum requirements of Five Star,” says Schenden, speaking of the dealers who have not yet achieved the designation. Schenden was Chrysler’s first Five-Star dealer in the nation when the program was created in 1997. http://www.autonews.com/apps/pbcs.dll/article?AID=/20070820/SUB/70817086&SearchID=73290941385154 (sub required) On Autoblog, a lot of customers feel the same way: “I think this has been happening for longer than the last couple weeks…and do you not think it’s a good thing that Chrysler is directing customers to it’s BEST dealers? Would you rather go somewhere and get sub-par customer service…or drive the extra 10 minutes and get the best service available?” Also from Autoblog: “…I think not listing a non Five Star dealer on the Chrysler web site is a great idea. it has nothing to do with “weeding out” dealers like some suggest, but more to do with rewarding dealers who work hard to do a good job. The same thing could be said with Chryler’s recent decision to only allow dealers into it’s used car auctions that buy a certain number of NEW cars. this has been a major problem in many small markets where dealers would have five or ten new units in stock, and 100 late model used cars. the factory doesn’t make any money on the used “program” units it sells at auction; as a matter of fact, they lose millions. The dealer/factory relationship is a two-way street (and this goes for any dealer/manufacturer, not just Chrysler), and both parties have to give and take. The domestics generally have a much better factory/dealer relationship than many imports, especially Toyota. hell knows no wrath like a Toyota zone rep with a vendetta for a particular dealer.” http://www.autoblog.com/2007/08/20/chrysler-giving-five-star-dealers-unfair-advantage-on-web/#comments My opinion is the company has the right to list who it wants to on it’s own website. After all the dealers are independent businesses (which they are all too quick to point out when it is to their advantage – remember the prices on the first Miata’s or any other desireable car? The dealers could gouge all they want over the MSRP because hey, their independent. Well so are the automakers.) And the kicker is that Chrylser DOES list all the dealers, they just don’t have the direct link for the non 5 stars. If this weeds out some of the bad apple dealers that we all love to bitch and moan about on this site then I’m all for it. Maybe Cerberus can show the way for Ford and GM.

  • avatar

    “I made an appointment for a 45 minute recall repair on my emissions. I showed up at the scheduled time and was told they could begin working on the car at 3pm (7 hours later). I would have felt better if the service rep would have laughed at me and said, “You thought you could make an appointment for a repair and actually thought we would honor it? HA HA HA! What turnip truck did you fall off?” Instead he just glared at me with palpable contempt.”

    This sums up my experience with my local Dodge dealer. However, I found one in Mansfield, Ohio, where I broke down that was very nice. So it just depends (although both are “5 Star”).

    John

  • avatar
    jberger

    I still don’t understand why selective linking is considered a bad thing.

    We all know the domestic dealer networks are too large and the service is poor when compared to most imports. What is wrong with the manufacturer being selective with lead generation?

    It encourages good behaviors and rewards success, isn’t that what we want?

  • avatar
    Redbarchetta

    It encourages good behaviors and rewards success, isn’t that what we want?

    That would be true if they were selling a product people wanted to buy.
    Right now they have lots of cars they are having a hard time selling, very hard time. (The small dealers can’t sell them either so they go to used cars sales to make ends meat) So now they are going to force these products on the market using there ’5 star’ better performing dealers, except that still leaves a very poor product in the customers hands, now he/she might never come back to a Chrysler dealer.
    I understand the reasoning behind this, but they are shooting themselves in the foot bigtime, unless the goal is to make future market share get even smaller.

  • avatar
    d996

    Five star is basically a rip-off of ISO 9000/9001 certification programs that Fortune 500 and international companies seem to like. It seemed to coincide with the elevated status of JD Power surveys/awards that really started to gain traction about 10 years ago. Power really is a genius, take data from all these insecure companies then sell it back to them. Kind of like that bitchy ex-wife/girlfriend that you told ” thanks for telling me all about my flaws that I really didn’t know I had till I met you “. Really, how much navel-gazing does this industry need to do? Five star leads are useless if there are no buyers.

  • avatar
    SherbornSean

    Chrysler to small dealers: “No soup for you!”

  • avatar
    blautens

    I think it’s great – Chrysler treating dealers with contempt – just as the customer is often treated.

    Slightly off topic, but I wonder if a real accounting of the sales bank had to be done for the sale to Cerberus. I’ll bet that plus the numbers sitting on dealer lots are staggering.

  • avatar

    It seems to me they could achieve the same goal of promoting the 5-star dealers by adding a small icon on the site to indicate which ones have achieved that status.
    Cutting them off from the Internet as a sales tool seems more like choking them out to me.

  • avatar
    Zarba

    Chryslerberus can manage its dealer network any way they want; it’s just window dressing on the real problem: PRODUCT

    PT Cruiser: Dead
    Caliber: Near hit, but junky. It’ll tank in a year.
    Sebring/Avenger: Crap. Brand new and already dead in the water.
    300/Charger/Magnum: Dying for lack of updates
    Durango/Aspen: Dead in the water
    Pacifica: Recent update not good enough
    Nitro: Crap
    Dodge Ram: Dead in the water
    Jeep Grand Cherokee: Way past its prime
    Jeep Commander: Dead in the water
    Jeep Liberty: Dying for lack of updates
    Jeep Compass/Patriot: Crap
    Jeep Wrangler: Hit!

    That’s one hit out of how many? The local dealers are giving away cars, and sales are still in the tank. You can smell the desperation in their ads.

    Bob and the Dog Boys are in deep kimchee, and they aren’t going to have enough time nor money to fix this before it augers in at a very high velocity.

  • avatar
    ThresherK

    After not refreshing my screen for 6 hours (dial-up user), not surprised that GS650G nipped in with Glengarry Glen Ross before me, so I xed it out.

    But I must say: Crisis Corporation? No more calls please. We have a winner.

  • avatar
    ktm

    It gets better. I heard on the news a few days ago that ‘select’ CARMAX (yes, CARMAX) dealerships in the Los Angeles area sell NEW Chryslers and Jeeps.

  • avatar
    ex-dtw

    Corss-boarder purchase…

    To add a few more cents into the discussion, these policies are intended to limit arbitrage opportunities due to the price differences. They are also not specific to Canada and the U.S. In Europe the same rules apply as taxes can significantly alter the costs in different countries.

    Incidentally, arbitrage is a problem because currencies move more quickly and fluctuate more than automakers want to adjust prices. This leaves opportunities for enterprising individuals to buy in one country and sell in another, which of course really irritates the local dealers.

    Additionally, prices are also set on what people can pay in a country and not just a single price converted to a local currency. E.g. see the price of anything in the UK.

    As has been said earlier, price differences between Canada and the U.S. used to be reversed. And I am sure if the currency stabilizes around an exchange, the difference might moderate. Then again maybe not.

  • avatar
    Redbarchetta

    Haven’t they been selling Chryslers at ‘select’ Carmax dealers around the country for years. I remember going to a Carmax in Atlanta a few years back that sold all new Chrysler/Dodge products.

  • avatar
    tech98

    Chrysler must understand that if they made fine products, they could sell them even near a dumpster with sales clerks shouting saliva in your face.

    As my local Toyota dealer proves.

  • avatar
    d996

    Chrysler must understand that if they made fine products, they could sell them even near a dumpster with sales clerks shouting saliva in your face.

    As my local Toyota dealer proves.

    All dealers are the same, some are just shorter.

  • avatar

    Carmax is getting into the new car business in several metro areas including Atlanta, DC, LA, Chicago, and Baltimore. (There may be others; they’re listed on their web site.) They sell Chrysler, Dodge, Jeep, Toyota, Chevy, and Nissan, or a mix thereof, depending on location.

  • avatar
    tentacles

    lovemangoes, I do believe our friend mikey is a GM man.

    As for cross-border warantees, I’m fairly certain that none of the Dai-san or any of the European makes will honor US warranties either. Mercedes has gone so far as to essentially make it illegal for Canadians to buy from US dealers, whether you want the warantee or not (and with Mercedes reliability, you probably do) – if you look at the Registrar of Imported Vehicles website, you’ll see that all Mercedes models being imported will require a certificate letter from Mercedes Benz Canada, which they will issue at their leisure, that is to say NEVER, or maybe only after you take it to a Canadian dealer for whatever “safety modifications” they decide you need. Either way, you’re not going to come out ahead financially, and I don’t know anyone who’s ever been successful – with the price differential among the higher end models exceeding $40k-$50K, there should be no lack of trying. I do know that all US dealers (for all makes)close to the border are being instructed specifically NOT to sell to Canadians, and various other regulatory hurdles are being thrown up as we speak on both sides of the border to curtail the traffic. Whatever your issues with this, you can’t blame any one particular manufacturer.

    Oddly enough, the only company that has embraced this trend is Subaru. Subaru DOES honor their US warantees in Canada as of now, albeit in a roundabout way (you pay up front and submit the receipt to Subaru USA for reinmbursement), and they have recently lowered their Canadian prices to bring them more in line with US prices. Better run down and pick up the STi while the picking’s still good.

    Then again, have you SEEN the new SUbaru models?

  • avatar
    tentacles

    lovemangoes, I do believe our friend mikey is a GM man.

    As for cross-border warantees, I’m fairly certain that none of the Dai-san or any of the European makes will honor US warranties either. Mercedes has gone so far as to essentially make it illegal for Canadians to buy from US dealers, whether you want the warantee or not (and with Mercedes reliability, you probably do) – if you look at the Registrar of Imported Vehicles website, you’ll see that all Mercedes models being imported will require a certificate letter from Mercedes Benz Canada, which they will issue at their leisure, that is to say NEVER, or maybe only after you take it to a Canadian dealer for whatever “safety modifications” they decide you need. Either way, you’re not going to come out ahead financially, and I don’t know anyone who’s ever been successful – with the price differential among the higher end models exceeding $40k-$50K, there should be no lack of trying. I do know that all US dealers (for all makes)close to the border are being instructed specifically NOT to sell to Canadians, and various other regulatory hurdles are being thrown up as we speak on both sides of the border to curtail the traffic. Whatever your issues with this, you can’t blame any one particular manufacturer.

    Oddly enough, the only company that has embraced this trend is Subaru. Subaru DOES honor their US warantees in Canada as of now, albeit in a roundabout way (you pay up front and submit the receipt to Subaru USA for reinmbursement), and they have recently lowered their Canadian prices to bring them more in line with US prices. Better run down and pick up the STi while the picking’s still good.

    Then again, have you SEEN the new Subaru models? They’re going to need all the help they can get.

  • avatar
    Dynamic88

    Suppose I were contemplating buying a Chrysler product (extremely academic, abstract, theoretical situation) would I actually be able to tell the difference between a 5 star dealer and a 2 star dealer? (Other than stickers on the showroom windows).

    My impression of Dealers – any brand- is that 99.99% of them a crooked scumbags. That perception (real or not) doesn’t change because a dealer has been awarded stars.

    I have a Chrysler dealer 5 minutes away from my home. Why would I want to drive to the next town to buy from a 5 star dealer? Is it the cleanliness of the bathrooms? The square footage of the showroom? Seriously, what would I notice as a customer that would make be give a tinker’s dam* about Chryslers dealer rating stars?

  • avatar
    LoserBoy

    What’s dignified about filing for bankruptcy protection?

  • avatar
    SherbornSean

    Dynamic88,
    Most people aren’t carnuts, and there are like a gazillion reasons why many people would buy one car over another. The very fact that those Chrysler dealers still exist, chock full of Sebrings and Aspens that will eventually get sold to someone, is proof.

    Know the #1 reason McDonalds is the top burger joint? Clean restrooms. Because the target customer is moms with young children, and restroom cleanliness is the most important factor in their choosing a restaurant.

    Those same moms would probably be fine with a Town & Country, so long as the dealership was clean, the sales rep respectful, and the monthly payment less than $400. It doesn’t always matter whether the Odyssey is a better vehicle.

  • avatar
    Landcrusher

    BMW Canada will honor the basic BMW North America (which is really just BMW USA) warranty, but not all the extras like free oil changes, etc.

    Much of the cross border harrassment is justified to keep the business stable, but Canadian dealers have higher costs and have mostly been able to bring in higher margins to boot.

    The currency issues could wreak havoc on their businesses on both sides of the border.

    Warranty transfers are an accounting nightmare.

    Given the taxes, buying new in Canada is kind of silly, though I guess the used prices reflect a portion of the tax, so maybe not.

  • avatar
    jthorner

    I don’t think it is unreasonable for Chrysler to give it’s 5 star dealerships better quality web linkage than it does to those who don’t make the grade and I don’t think it is unreasonable for Chrysler to only open it’s program car auctions to dealer who hit certain new car sales targets.

    The dealers and their political friends use every tactic possible to antagonize their manufacturers and little love is to be lost for those so lame as to not be able to hit the “5 Star” service level.

    Considering how bad some of the dealers who have made the grade one must wonder about those who don’t. “5 Star” Chrysler dealerships are about as rare as B- average high school students.

  • avatar
    maxxm

    After 52 comments, I am surprised that no one mentioned the obvious — none of this is news at all. I spent some time on the Chrysler website just over three years ago, and I can assure you that the discriminatory hyperlink referrals to the dealers in the markets that I researched were exactly the same then as Frank Williams described them in his piece today. If it’s bad now, it was also bad then.

    Indeed, this kind of irrational favoritism may be one of all-too-many reasons that are responsible for the decline of the company. But the real point is, of course, that they never learn, do they? And you know what happens to those who are too smug or too naive to learn from history….

  • avatar
    NickR

    Sometimes when I read these stories I think I am reading The Onion by mistake. Still, good for a laugh. Thanks Chrysler.

  • avatar
    AGR

    The 5 Star designation was/is not a big deal to achieve and maintain, that one has to wonder about the non 5 Star dealers. The non 5 Star dealer is seen as the one that does not “tow the line”.

    The facilities and CSI scores are probably the 2 major bench marks for the 5 Star designation. Most manufacturers have a variety of programs to grade their dealers.

    Toyota is starting to question the size of their dealers, as sales increase Toyota is concerned that dealers provide a diluted “customer experience” consequently the argument of huge dealers can also become counterproductive to proper automotive retailing and servicing.

    Manufacturers have always frowned on the Canada / USA border trade for new or recent model vehicles, at one time prices were cheaper in Canada now prices are cheaper in the US. Most manufacturers place hurdles to discourage cross border purchases. If one legitimately moves from one country to the other most manufacturers are very accomodating regarding the warranty transfers. Franchised dealers are highly discouraged by their respective manufacturers to engage in cross border sales. In many instances if manufacturers discover that a dealer willingly engaged in cross border sales, it becomes a costly financial and allocation experience for the dealer.

    When the Canadian dollar was low a few years ago, customers had to sign non export agreements prior to taking delivery of certain “hot” models. If the customer refused to sign the non export agreement, the dealer would not sell the vehicle.

    The introduction of a new model in Canada is the ideal opportunity for any manufacturer to adjust their pricing to the current exchange reality.

  • avatar
    kkop

    CarMax is not ‘getting into the new car business’, it’s been selling Chrysler products for years in the Atlanta store and other brands (such as Nissan) in stores around the country.

  • avatar
    ilovemangoes

    For the record, 5-6 years ago cars were not cheaper in Canada. It was cheaper to buy a car in Canada with USD due to the exchange rate. Cars were still paid for in CAD.

    Since that time our dollar has risen over 50% against the USD, yet car prices have not declined in real dollar terms. It is not that manufacturers are slow to react to the exchange rate – they just don’t react at all.

    The manufacturers may not like consumers cross border shopping, but that doesn’t mean that we shouldn’t.

    There are enough car manufacturers who WILL register their warranty across the border, so I will choose my new car from one of them.

    GM got back to me in writing yesterday stating that you cannot buy a new vehicle for importation, but anything 6 months old with at least 7,500 miles is good to go and they will transfer no problem.

    Why, if it is such an accounting nightmare, would they allow this to go on?

    Me thinks the limitations from other manufacturers are artificial in nature.

    Sorry mikey for inferring that you worked for Chyrsler.

  • avatar
    jackc10

    “….sales professionals [who] are product experts trained to make sure you find the vehicle that best suits your needs [and] service and parts professionals… trained by DaimlerChrysler to properly diagnose your vehicle, repair it right the first time, and get you back on the road quickly.”

    Do these people ever visit their brand dealerships outside of Detroit?

    I have an old Dodge PU. I occasionally go to the local 5 star dealer for oil change when the weather is bad around here. I also go the parts department to get new tail light lenses. They seem to be SUV magnets.

    Each time I go, I am attacked by these trained sales pros who run over each over out the showroom door, anxiously wishing me well, asking for my name and offering a test drive. Sometimes they get in the way so another can come to my door and other times they are lined up like border guards, or barkers on Bourbon Street when I leave. It is as constant as the list of major items listed in dire need of replacement or repair recommended by the 5 star service department, that my regular mechanic says I do need this year or ever.

    It is as aggravating as driving into a QT in my truck to get gas and have the illegals start jumping in the back.

    I know both groups need money and at least they are calling me on the phone at all hours but I could do without both. I have my own lawn mower and a trained sales professional is the last person I want to deal with at vehicle buying time.

  • avatar
    motownr

    A few tidbits about 5 Star:

    IMO, it’s probably one of the most discredited policies in the industry; plain and simple, it’s a sales tool, not a customer service program.

    My favorite 5 Star tactic is the “pump out” game: Chrysler gets into a tussle with a 5 Star dealer over sales/inventory, and, WHAM! Suddenly that dealer isn’t 5 Star any longer.

    But wait–his non-5 Star competitor down the road? Suddenly…he is!

    Guess who gets all the sales leads from the internet? Not the dealer that Chrysler would like to order a few more hotcakes like the Durango, Aspen, etc.

    Cerberus has a hellacious task in front of them if they truly intend to fix Chrysler: the product is just the beginning….the corporate culture is, in my experience, rotten to the core.

  • avatar

    Mixed feelings about this one. On a corporate-survival level, this is three kinds of dumb. On a consumer level, I would really like there to be some kind of carrot/stick arrangement to get car dealers (not just Chrysler’s) to shape up. I don’t know that Chrysler’s Five-Star System does that — in point of fact, I doubt it — but I’d like to see something. My experience with pretty much every car dealer I’ve ever dealt with has been awful. Good dealer service is not enough to get me to buy a lousy product (witness Saturn), but lousy dealers AND lousy products means I won’t even consider a make.

  • avatar
    brettc

    ilovemangoes:

    My brother just bought a 2006 Mazda MPV from a dealership in Guelph, Ontario, that specializes in selling used vehicles from the U.S. He paid $10000 less for it than he would have for a similar model that was intended for Canada. As far as I know, he still has warranty coverage on it. That’s good that even GM will allow a vehicle after 7500 miles. Too bad Chrysler won’t do the same. God forbid they sell a vehicle, we can’t have that!

  • avatar

    It looks like T. Lasorda could be on the way out as I note from this morning(Sept.6th) Detroit News that Chrysler-Cebrus has hired someone from Toyota to have the same job as Lasorda has or had! Interesting times ahead I think!

  • avatar
    Pete Gravell

    Yeah Toyota wants your buisness. Then after you buy it, you’ll be right back at the Dodge dealership trying to trade it in, BECAUSE THERE A BIG DISAPOINTMENT. AND IN THE WORLD WHERE EVERYBODY IS CONCERNED ABOUT BEING “GREEN” THE TUNDRA IS A HUGE LET DOWN. 10-12 MPG WITH PREMIUM FUEL REQUIREMENTS AT REALLY HUGE PRICES IS NOT GREEN> in any sense of the word. If You want to tow 10,000 lbs get a DIESEL!!. everybody loves to slam Chrysler, they want to see them fail. but not everybody in the world can afford a new vehicle, and there is ALOT of old Chrysler/Dodge/Jeep still out there as well as Ford/Mercury and Chevorlet/Buick in a million times better shape than a 1997 toyota, or honda. AND I HAVE SEEN ALOT OF BIG 3 Products with 200,000 or more miles, still strong and in good shape, despite fender benders and the winter. It’s just like the media and politicians, nobody listens to the silent majority. because there too afraid of people with common sense. Just like people who think corn alcohol is the fuel awnser. what you dont hear about is the 1.5 gallons of diesel fuel burned per gallon of alcohol made just to plant/till/harvest then add on the requirements to boil and purify the alcohol. DUH!!!!

  • avatar
    Pete Gravell

    ooooooh, almost forgot. as for the demise of Chrysler. there like Cockroaches and Kieth Richards , nuke the world, they would survive. Good ol’ “Ma Mopar”


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