By on February 6, 2017

old dealership Chrysler

Fiat Chrysler Automobiles wants to grow its dealer network by 380 new stores in a bid to improve its dwindling market share. The plan isn’t going over so well with the company’s existing dealers, however. As the strategy could potentially threaten their present businesses, some of those dealerships are putting up a fight over the issue.

The choice to expand comes at a difficult time. Sales locations aren’t doing the best and suffering through a diluted and unpopular product lineup while the automaker shifts its focus away from cars to the more-popular SUVS and trucks. FCA sales have been on the decline for almost six months and the company’s slice of the U.S. market fell to 12 percent in the fourth quarter of 2016, compared to 13.6 percent in the same period of 2015. The expansion decision also goes against the advice of FCA’s dealership location consultant, Urban Science.

Automotive News claims the expansion plan was confirmed by two separate dealers, while a company source verified that Urban Science data doesn’t support the creation of new dealerships.

Some existing dealers have gone so far as to complain to state authorities. Two dealers cited a proposed lot in Kenner, Louisiana that would be situated near three existing FCA dealerships and isolated by a large swamp on one side and a lake on the other. Accessible sides of the planned Kenner dealership would be less than five miles from current dealers.

While a complete list of the 380 proposed locations is not available, dealers have told Automotive News of some specific areas, including the Kenner site near New Orleans and three in metropolitan Houston. Other proposed dealerships target suburban and metropolitan areas across the country.

[Alden Jewell/Flickr (CC BY 2.0)]

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64 Comments on “Old Dealers Indignant Over FCA’s Plan to Expand Network by 380 Stores...”


  • avatar
    dukeisduke

    Gee, I remember Fred Oakley Motors. The dealer closures in 2009 had a political component, too. Dealers connected to Democrats (like the Landers and McLarty chains) were spared, while GOP-connected ones were closed. One here in our part of town (Manuel Dodge in Richardson) lost their franchise and became a used car dealer, and then folded, and then later another dealer in Richardson (Richardson CJD) was opened.

    • 0 avatar
      PrincipalDan

      Really, you believe there was a political component to the bailout that started with GWB?

      The one that closed in Gallup NM was owned by a family that is an ethnic minority but had a terrible reputation for the way they did business.

      Fortunately another Chrysler dealer opened there about 2 years later. Much better reputation, would actually make me consider owning a Chrysler product.

      • 0 avatar
        dukeisduke

        The bailouts started under GWB, but the Fiat acquisition of Chrysler was in 2009, and yes, I read about party affiliation being part of the equation. Some dealers closed because of poor financial condition or low volume, but those weren’t the only considerations.

      • 0 avatar

        Yes, Dan, I do.

        Not with GM, but definitely with FCA.

        Entire sections of our area lost each and every ChryCo store while other sections were amazingly spared.

        Here’s the story of two of those dealers; the first one definitely reeks of politics as it was a leading Dodge store in a prime location. https://www.youtube.com/watch?v=aQCRqMnDui0

    • 0 avatar
      DevilsRotary86

      I remember Manuel. My supervisor leased his Grand Caravan from there years ago, and I went to them twice to look at cars. First time was in 2007 to consider a Dodge Caliber for my wife and second time in 2010 to look at a Dodge Challenger for me. Both times I came away with a real sleazy impression of them. While my supervisor had an OK time with them; my wife and I didn’t feel like it was the sort of place we would want to buy a car from.

      I can’t even put a pin on it; something just felt off. So I was not surprised when they lost their franchise when there was a much better and much nicer dealer only 10 miles away in the form of Dallas CJD (now RAM too) on LBJ and Jupiter. However, I am surprised that they allowed a new franchise to open at the same location. It seems silly to me when there is already a successful franchise open so close.

      • 0 avatar
        syncro87

        Devils, don’t EVER tell your wife you considered putting her in a Caliber. Women can be pretty forgiving, but certain offenses are just flat out deal breakers.

        • 0 avatar
          DevilsRotary86

          She was with me when we looked at it. We decided it was too big for her. Wound up with a Honda Fit instead.

          My brother in law actually drives one that he bought used from Carmax. It’s a perfectly fine car for someone who doesn’t care about cars (most people) and just wants useful transportation at the lowest initial cost possible.

        • 0 avatar
          DevilsRotary86

          Ooops! I said a swear word and my comment ended up in “awaiting moderation” land, possibly never to return.

          She was with me when we looked at it. We decided it was too big for her. Wound up with a Honda Fit instead.

          My brother in law actually drives one that he bought used from Carmax. It’s a perfectly fine car for someone who doesn’t care about cars (most people) and just wants useful transportation at the lowest initial cost possible.

          Admittedly, profanity was not really required and my statement did just fine without it with a little tweaking.

        • 0 avatar
          dukeisduke

          What’s a Caliber supposed to be, anyway? It’s too weird looking to be a car, and not roomy enough the be a CUV.

          • 0 avatar
            DevilsRotary86

            It’s a sub-compact CUV, in the same vein as the Kia Soul, Honda HRV, Mazda CX3, etc.

            The Dodge Caliber, the Chevrolet HHR, and Chrysler PT Cruiser all fit in the same category of “sub compact CUV’s that were sold before Kia found out that CG Hamsters could make them cool, and discontinued shortly before the segment caught on”. Sometimes the domestics just can’t catch a break.

          • 0 avatar
            April S

            I always thought the Caliber was a twist on what Chrysler did with the Dodge Shadow/Plymouth Sundance sedan and coupe hatchbacks.

      • 0 avatar
        dukeisduke

        I only ever bought parts at Manuel, not cars, but no, they didn’t have the best reputation. I’ve never had a lot of use for dealers that use a lot of screaming or bombast in their ads – I can think of a lot of DFW dealers that fell into that category.

      • 0 avatar
        TheLastMaxwellDealer

        What was off was the extreme pressure being put on dealers by DaimlerChrysler to sell the unbalanced inventory they forced on the dealers. Factory sales division managers were building sales banks filled with mostly top end high MSRP units because they were paid on the dollar volume. What is more, they had a lop-sided dealer incentive system that increased when you ordered more vehicles, but to some dealers these incentives were not offered. This perversion found its way to the sales floor and was felt by the customer. By the time DaimlerChrysler declared bankruptcy in May 2009, dealers were selling cars for a loss just to get rid of them and the 789 terminated dealers just had to unload them so they would not be stuck with them when the franchise ended.

    • 0 avatar

      This is patently ridiculous. Most auto dealers are registered Republicans, between 65% and 75%. There were PLENTY of Republican dealers terminated. In fact, if you ignore the fact that most dealers are Republican, the raw numbers indicate MORE Republicans were terminated. For the record, I considered the terminations legal but stupid and counterproductive. I had NEVER heard a factory guy say fewer dealers were in their best interest. And now, here we are. Back to “inventory pressue sells cars.”

      • 0 avatar
        TheLastMaxwellDealer

        Of the 789 dealers terminated, 788 were Republicans. The lone Democrat dealer had donated heavily to Clinton and more to Edwards than Obama. The terminations could be considered legal. What was illegal was the White House’ Car Csar allowed was the suspension of bankruptcy protocols. That is how unions were favored over the secured stock holders and creditors in the repayment of the assets and dealers could not seek redress in the state franchise laws.

    • 0 avatar
      CarDesigner

      If you can find it, watch the documentary, “Live Another Day” that tells the story of the Car Czar and the Feds bumbling response to their self-induced financial crisis. It barely goes far enough , but does tell the story of the GM & Chrysler dealers that had their life savings & investment destroyed overnight. This is Big Government at its finest.
      Also look up and buy any of Jason Vines books on Amazon. He was the PR guy for Chrysler & others and has stories!

      • 0 avatar

        Bumbling? Self induced financial crisis? Well, first it wasn’t self induced. The credit system was frozenm. Without credit available you can’t sell cars even in a good economy. Bumbling? It wasn’t done perfectly with the benefit of hindsight. But it was far from “bumbling.” Even Cash for Clunkers played an important role.

        • 0 avatar

          Dealers have their businesaes destroyed more by the Great Recession than anything else. And that was caused by a LACK of government, NOT “big government,” whatever that is. RW ideologues blocked the effort to force issuers of credit default swaps to reserve capital to pay potential claims. Further, the SEC was gutted by the Republican House when we needed them most.

        • 0 avatar
          CarDesigner

          SEE the movie before you condone the quality of the Feds work. The Feds created it by encouraging bad mortgages, didn’t oversee the financial markets even though people in them knew it was a house of cards. Then the banks quit loaning money to consumers OR companies. This unprecedented action was close to the depression/crash. The Feds would NOT listen to any industry experts or people from manufacturers or suppliers. Congress trashed and insulted the companies. The SEC destroyed Chrysler by not kicking Mercedes butt for their fake “merger”. They then proceeded to pillage the company to the bone, sell it to stripper/flippers, then GAVE it away to Fiat. But they “saved” Chrysler. Watch and see how the company will get parted out piecemeal in the next 3 years. Marchionne is killing it slowly.
          Cash for Clunkers was the biggest scam going. An entire generation of good used cars were taken off the market for low income people, didn’t do squat for the environment or the economy, but a few people got real rich from it.

          • 0 avatar

            The Feds, whoever that is, did NOT encourage bad mortgages. You’ve been duped by the RW narrative. But you’re free to tell us exactly how “the Feds” might have done that. If you’re trying to blame the CRA, the few CRA loans have OUTPERFORMED the overall mortgage market. The CRA NEVER authorized Alt A, NINJA, Reverse AMO, Interest Only, etc. EVER. Fannie and Freddie were NEVER allowed to buy those. So who bought them? Not banks who actually hold paper. Answer: Securitizers who could sell the risk upstream rated AAA because of UNREGULATED credit default swaps. Guess who blocked the effort to force issuers of the swaps to reserve capital to pay potential calims? The banks stopped lending because they had no cash, only toxic assets. Cash for Clunkers AND the lack of new vehicle sales created a used vehicle shortage that gave owners of the average used vehicle an immediate $2500 of equity.

            If your predictions are like your “knowledge” of history, I’m not too worried.

  • avatar
    dukeisduke

    Who would open an FCA franchise now, anyway? That company is on the way out.

    • 0 avatar
      JimmyC

      You really should get some training analyzing financial statements. FCA’s business has strengthened each year since the bankruptcy. You can look at sales, market share, volume, etc. Sergio has committed to Wall Street that he will have the company at 10% profit and positive net cash of $4-5B on the balance sheet by the end of CY2018. FCA’s retail sales in the United States were just 839 behind Ford Motor Company in January — 109,350 sales vs Ford’s 110,189. In what universe does that equal on the way out? Is Ford on the way out also?

      • 0 avatar
        CarDesigner

        Maybe you should take off your eye shade and look at their products, before issuing short term rose colored outlooks.

        He has effectively killed the Dodge brand and Chrysler cars are starved for product. High margin Jeeps and trucks sell real well until the next downturn, then he has nothing! Fiats suck, and the Alfas are a non-starter. He will likely part out the Jeep brand, the Pacifica, and Ram trucks. Dodge and Chrysler are/were history. IF there are any cars left, he will sell those to the Mexicans or Brazilians. Quality has been on nosedive for the last 10 years because of his imperial attitude toward launches.

        • 0 avatar
          JimmyC

          The criticism of Chrysler quality has continued nonstop for the last 40 years.If negative Consumer Reports ratings were going to kill the company it would be already dead. Virtually no one who reads CR will buy a FCA product. Also, my engineering friends that worked for Ford & GM advised me in the 1980’s not to work at Chrysler and predicted that the company had only been temporarily saved by Lee Iacocca and would soon be bankrupt and gone. These predictions were repeated continuously to me throughout my entire 30 year career. I’m retired and am now listening to you make the exact same predictions using the exact same arguments. Sergio will fix the balance sheet as planned to prepare FCA for the inevitable cyclical downturn, and then FCA will intensify product investment post CY 2018. Believe it or not, he knows FCA’s business better than you. Without his vision and strong leadership, the company would not exist. He is not planning to sell the company brands because they do not exist as pieces that can be sold. Making that accusation shows that you don’t understand how the company is actually structured and operates. You are not alone, most outsiders and even many company employees don’t really understand how the company operates due to internal secrecy regarding company operating data. There are many new products coming, they just don’t talk about them until they are within a few months of release. My well meaning friends were wrong in the 80’s and the doomsayers are wrong now.

          • 0 avatar
            CarDesigner

            JC-
            Have 40 years experience in the advance design areas of the Big 4, and had 18 when I retired at DamnearChrysler.

            The folks at Ford and GM had no clue, until Chrysler blew past them with product, concept vehicles, and profits. It has taken over 10 years and they never really caught on or up. Your friends did not know how Chrysler was able to do so much with so little and still don’t. I have seen the culture and management decisions of these companies up close. The Tom Gale era of design at Chrysler, did produce outstanding cars, with steadily improving quality, and billions in profits. Pensions were well-funded and there was $13B+ cash in the bank. Mercedes killed all of that and pillaged the company of patents and plus more cash over 9 years. Chrysler saved Mercedes when their costs and quality sucked. Buying AMC/Jeep was the smartest thing he did. Lambo and Gulfstream, not so much. His mistake was in blowing Lutz off as CEO for GM back-bencher Eaton. Him and 5 other execs got paid millions to not invoke the Post Kerkorian/Iacocca poison pill, thus cheating the stockholders out of a takeover premium.

            The ONLY balance sheet SM will fix is Fiats. He has NO product in the pipeline. NO cars of consequence & a proliferation of generic trucks and not-real Jeeps. He has NO succession plan, the org chart is flat, not a pyramid, and he doesn’t get product, nor history, OR care about either. Read the http://www.autoextremist.com blog by a long time insider that knows the business. He is even less complimentary.

            In case you haven’t noticed, there are NO Dodge Trucks anymore, no Chrysler minivans, and the old Dodge minivans are going away next year. Importing Italian built Jeeps will not improve the quality numbers either. By de-branding the vehicles, he can part the company out or sell leftovers to more schmucks like the Cerebus 3 dogs.IF you actually know about product no one else in Detroit knows about, please share it. They are paying me a pension and I’d like to keep getting it.

            YOU do not understand the business of designing, building, and selling vehicles with comments about how the balance sheets will make it all better. The product pipeline does not bode well, trust me. He talks a good story, but doesn’t follow thru on product. Try and name a good launch! Lord knows the folks working there are doing their best, but the buck stops at the top and the picture isn’t pretty for the future.

          • 0 avatar
            tresmonos

            CarDesigner,
            Your comments about the pipeline and general well being are echoed by my friends at Chrysler. God save them all. Lord knows the corporation survived Dr. Z., maybe then can weather Sergio?

          • 0 avatar
            CarDesigner

            Jim C-
            I sure can hope that he would come to his senses sooner, than later, but it is hard to be optimistic at all. At first he appeared to have a handle on things, like putting some money back into the product, but he has had a revolving door of yes-men and made poor decisions to suit his needs. He is being viewed as a carpetbagger, saying he will be out of there by 2018. No successor, so then what?

            They were down to about 5,000 people in Auburn Hills, after Cerebus destroyed the company. Even Ratnor said they didn’t have enough people to design and build cars. SM hired tons of non-loyal, no-experience contractors, blowing well past the 12,000 or so employees, before Cerebus to over 15,000! Then, he closes the museum (run by free volunteers), to turn it into more office space, so they can hire a couple thousand more carpetbagger people. The corporate knowledge base has been eliminated. Anyone over 45 is relegated to crap work, until they need someone that knows what they are doing. Lots of wasted effort, changing directions midstream at great cost, and rotating management, all exacerbate the problems of corporate direction. There will be NO merger with GM, or anyone else. Fiat will suck all the profits out, until there is nothing left, because they can never layoff employees and close plants, since they are owned by the socialist government and unions.
            Good night, and good luck! :-)

          • 0 avatar

            Car designer there is a brand new Chrysler minivan actually.

          • 0 avatar
            CarDesigner

            And it is being advertised as the Pacifica, with Chrysler in parentheses!

            See the marketing ads that look like minivan ads. Ralph Gilles said it was designed to be as “sexy” as a SUV. Marketing missed the message.

    • 0 avatar

      The RAM pickup is the 4th best selling vehicle in America. That and some high margin Wranglers would probably easily make up for the rest of the rather lame lineup.

      • 0 avatar

        Not to mention the other Jeeps. Besides, a dealer’s viability has NEVER been about new car sales. The most profitable dealers I’ve known sold FEW new vehicles compared to program cars and other pre-owned. Of course, the factory hated them.

      • 0 avatar
        Lorenzo

        If they would update and correct flaws in existing models instead of killing them off (Caliber, Avenger, Dart, Chrysler 200) they wouldn’t need to sell lots of Rams and optioned up Wranglers to make up for them, they’d add to a bigger bottom line.

        • 0 avatar
          danio3834

          Dealers don’t actually want to sell those small cars with low built in gross profit. Most dealers don’t lament the loss because they can move that customer into something else that makes more money. Many salespeople won’t even bother with a customer unless they can steer them into a truck or SUV.

          • 0 avatar
            CarDesigner

            That works real well until gas prices and unemployment spike. I worked in AMC Advanced Design 1977-1985 and if times were bad, they sold smaller cars, when they got better, they sold Jeeps. Since then, Jeeps have become more mainstream in design and use, but always at a premium, for the “name”. 3 times in Chrysler history they proved they could build profitable small cars, despite the pundits saying that they couldn’t. The Omni-Horizons were good cars at a good price and they sold in the hundreds of thousands. The Neon came out as “Nicely equipped at under $14,000. The PT Cruiser was a tall Neon, marked up a bit and was wildly successful, until the incompetent management couldn’t figure out how to update it. The Sebring convertible owned the reasonably priced, 4 adult passenger convertible market, selling over 30,000 cars a year with virtually NO advertising and marketing. If they had better content and marketing they could have sold a lot more. Never mind about the ill-designed Ghia retractable top that left no trunk room and looked pin-headed. Good car, but poorly executed in many ways.
            The dealer model is a scam. The car companies foist all their car wholesale sales on the dealers, then they have to figure out how to sell them, while carrying all of the inventory. No one orders a car anymore, just buy off the rack. Consequently, Product Planning builds all black & white cars with high profit, overpriced “packages”. They have a dumb proliferation of wheels, minimal color selection, and a penchant for ugly black/charcoal or greige interiors. The factory plays games with pricing to the dealers, twice a month, and the consumer gets scammed every time.

    • 0 avatar
      danio3834

      Anyone who wants to make money. They’re incredibly profitable franchises.

  • avatar
    OldManPants

    I hope Urban Science has found another trough.

    • 0 avatar
      28-Cars-Later

      Urban Science sounds like a bar, a band, a fruity drink, and a hipster website, but it doesn’t sound like the name of an actual for profit company to my ears.

    • 0 avatar
      AoLetsGo

      No worries about Urban Science, they own the locational aspect of the dealers/factories for every single company. Their troughs overflow with liquid gold.

      • 0 avatar
        OldManPants

        “they own the locational aspect”

        What’s that mean, they help OEMs locate overflow storage for their dead inventory?

        • 0 avatar
          AoLetsGo

          Ha, even the OEM guys can figure that out. They do the analysis of behind the decision on when, to add, delete or relocate a dealer. They also have a system that determines how effective the dealer is selling each car and truck type based on what the modeled estimate of what they should be selling. Basically are they getting the market share that they should be in their trade area/primary area/designated territory/their geographic space.

          • 0 avatar
            Lorenzo

            So! They’re a low overhead number cruncher/ strategizer. I can visualize top management in expensive Valentino suits pulling down big bucks while minions in white JC Penney shirts crunch numbers with computer mallet programs.

          • 0 avatar
            cognoscenti

            @Lorenzo – Urban Science is located in the Ren Cen, and after working alongside them for years I can tell you that their appearance is indistinguishable from the business casual-attired GM/OnStar employees on the floors above and beneath them.

  • avatar
    28-Cars-Later

    Sales down? Product pipeline at a trickle? Expand the dealer network!

    • 0 avatar
      stingray65

      This isn’t about what would be effective, its about showing shareholders that management is “doing something”, and it won’t cost anything because and all the costs are borne by the franchisees.

      • 0 avatar
        AoLetsGo

        This. Expanding the dealer network is a smoke and mirrors sideshow for shareholders to distract them from the bigger problems FCA has.
        What is really funny is we have heard nothing but the same old song and dance from the Big 3 for 30 years – “our dealer network is too big and we have to trim them back”. Ford even went so far as to try and buy out dealers and open corporate Ford stores, what a f*in diaster that was.

      • 0 avatar
        28-Cars-Later

        Nice post.

  • avatar
    npaladin2000

    I bet most of the dealers that are complaining are the dealers that insist on sucking as far as consumers go. I would think the “expansion” is to put pressure on the bad dealers and force them to shape up. This, of course, they don’t like so much.

  • avatar
    OldManPants

    Oakley Motors looks pretty seedy even back then. Wonder if that’s the same Fred Oakley as the construction company in TENNessee.

    • 0 avatar
      PrincipalDan

      That picture immediately made me think of the early 80s M-body Plymouth Gran Fury. Rare in civilian guise but often seen with flashing lights on it.

      • 0 avatar
        OldManPants

        I’d take any one of those love boats new over anything today. That heavenly cush is worth a little stooping to enter.

        • 0 avatar
          PrincipalDan

          One of the classic car dealers who posted their wares online had a 1984 Plymouth Gran Fury BROUGHAM for sale a few years back.

          Refrigerator white with tan pillowed velour, 318 V8. Kinda like a poor man’s Fifth Ave.

          • 0 avatar
            OldManPants

            I thought those M bodies were beautiful and an excellent if late response to GM’s downsizers.

            But if I could have a mid-70s Gran Fury I’d OD on endorphins. OldManCars!

          • 0 avatar
            28-Cars-Later

            I bet you’d drive everywhere in a Fury.

        • 0 avatar
          MRF 95 T-Bird

          They look like they are in for repairs for their Lean Burn system. Except for that nice New Yorker or Imperial fuselage coupe.

    • 0 avatar
      dukeisduke

      They could be related, but I don’t think they’re the same. Fred Oakley had been in business for quite awhile, in the Oak Cliff section of Dallas; they later moved to Irving.

  • avatar
    Dave M.

    I went by my local Chrysler Jeep Didge Ram dealer yesterday to kill some time lot shopping. Wasn’t impressed with their thin inventory and relative lack of options choices. It was weird….

  • avatar
    mike1dog

    I look at the included picture of a Chrysler dealership, and I can’t help wondering who worked as a salesman there. I picture Herb Tarlek from WKRP wearing white loafers and a baby blue suit.

  • avatar
    Lou_BC

    Open more dealerships to sell more pickups and Jeeps. Wouldn’t that just mean less vehicles for each dealer to sell?

    • 0 avatar
      indi500fan

      There seems to be plenty of inventory.
      A new FCA store is going up in my neighborhood.
      Even though there’s a lot of construction remaining (like no windows or doors installed yet or paving in the lots) they have begun filling the back lot with new Ram trucks.

  • avatar
    namesakeone

    Where I live (Metro Detroit), there are still two closed and never reopened Chrysler/Dodge dealerships. They’ve been vacant for seven years.

  • avatar

    Are any of these Alfa dealers ? Weren’t those promised to the guys who built Fiat stand-alones for one car ?

  • avatar
    ponchoman49

    Love the photo

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