By on February 13, 2017

2017 Ram 1500 Laramie Limited Crew Cab 4x4

Fiat Chrysler Automobiles has made a turnoff on the wrong road in the hopes of boosting its flagging sales, argues Jim Appleton.

The president of the New Jersey Coalition of Automotive Retailers is accusing the automaker of being reckless and short-sighted in its bid to open 380 new dealerships across the country. If FCA wants to reverse its market slide, Appleton claims, it should first take a good hard look at its product.

As the voice for 500 franchised dealerships in his state, Appleton echoes concerns already heard from dealers in other states. Mainly, that creating a critical mass of FCA dealers in certain locations only serves to punish those that were there first. It can also be a self-defeating move that doesn’t help the brand.

While it’s possible for a dealership to protest the decision to install a new dealer in close proximity to an existing one, it’s an arduous process most franchisees would prefer to avoid. Franchise laws are already being broken, Appleton claims in an Automotive News op-ed:

“In this small but densely populated state, FCA has proposed adding or has already added franchises just a few miles away and smack in the heart of the territories of existing dealers.

“In at least one such case, FCA bulled ahead, even though the existing dealership is on a major roadway, with high traffic volume. FCA has even purchased a location in New Jersey and is pressing forward in an attempt to ‘stockpile’ an approved point, even though they have no proposed dealer or relocating dealership to install in the location.”

Challenging the limits of state franchise laws “is dangerous and short-sighted behavior on the part of FCA,” Appleton argues. Undoubtedly, he says, the new FCA dealerships will cannibalize the sales of existing independent retailers. A focus on products and competitive pricing could reach the same goal.

The automaker, however, no doubt sees the new dealers as a way to get the biggest bang out of its new product buck. Next-generation versions of hot-selling models are on the way. Among them, the upcoming Jeep Wrangler and Ram 1500 — due out for the 2018 and 2019 model years, respectively — stand to generate the most buzz, and the most sales.

Even as FCA advances its strategy, not everyone in its inner circle is on board. Dealer location consultant Urban Science reportedly advised against the network expansion.

[Image: Fiat Chrysler Automobiles]

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