Old Dealers Indignant Over FCA's Plan to Expand Network by 380 Stores

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.

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