Fiat Faces Dealer Insurrection
Fiat is facing a new distraction. While Sergio Marchionne has worldwide plans with zombie Chrysler, Fiat is facing an insurrection at home. Well, close to home. The German dealer council of Fiat has unanimously decided to sue Fiat Germany.
Two actions by Fiat raised the dealers’ ire:
To cope with the post-Abwrackprämien-partem blues, Fiat plans to give rebates of up to 28 percent. Without consulting the dealer body, Fiat issued an edict that the dealers should contribute 12 percent, Fiat would bear the remaining 16 percent, says Das Autohaus. The dealer council thinks that many dealers won’t survive this operation.
The second bone of contention is that Fiat delivered cars to their dealers which were never ordered. Many Fiat dealers found themselves with unwanted new Fiat Evos on their lots.
The dealers are ready for war. At their meeting last week, there was no representative of Fiat. Instead, Christian Genzow, a firebrand lawyer who is feared by automakers throughout Europe, gave a speech and instructed the dealers to simply return the unwanted Evos.
Before the Fiat dealers decided to sue, there were plenty grumblings in Fiat’s distribution channel. For years, Fiat and their German dealers fought in court about parts rebates. The suit was finally settled.
The German dealer association is regarded as influential. Many German dealers own dealerships in the rest of Europe. If the conflagration is not brought under control, Fiat can get burned big-time in all of Europe.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Looks like Fiat can channel stuff with the best of 'em. Maybe Chrysler and Fiat were made for each other...
Doesn't sound a whole lot different from the Burger King franchise holders suing the King himself for unilaterally setting prices on the value meals supposedly resulting in the franchises selling these meals below their own cost. (There have also been scattered reports of the franchise holders refusing to smile and sing the old BK tagline "Hold the pickles, hold the lettuce. Special orders don't upset us".)
As a matter of law, franchisees can sell for whatever price they see fit. As a matter of reality, franchisors will make sure you do it their way, or there's sixty ways they can yank your frnachise rights. At least in the USA.