Chrysler council chair: Best product ever
Dealer since: 1987
Dealership: Brown's Jeep-Chrysler-Dodge, Patchogue, N.Y.
Other brands: Fiat
Average monthly sales at Chrysler-Dodge-Jeep dealership in 2012: 183 new, 60 used
Quote: "With the January launching of the volume growth program, I'll be curious to see how it will pan out for the dealers and for the factory."
Last year saw Chrysler Group's market share return to prerecession -- and prebankruptcy -- levels, thanks to an unbroken streak of month-over-month sales gains. The company's product overhaul continued with a re-engineered Ram 1500 pickup and the introduction of its first Fiat-based vehicle, the 2013 Dodge Dart.
A reworked dealer standards program freed many dealers from the constraints of mandatory renovations of their businesses but also eliminated the incentive payments that came with meeting factory demands.
Staff Reporter Larry P. Vellequette spoke with Gary Brown, chairman of the Chrysler National Dealer Council and a Chrysler, Dodge, Jeep and Fiat dealer on New York's Long Island about the current state of Chrysler dealers and what's on the horizon in 2013.
How did you get into the business?
My grandfather started the business in 1917. He had three sons, and I'm the last one in the family that's with the dealership. I got a degree in mechanical engineering, and I worked as a production engineer for six or seven years before I moved back in 1987 and bought out my uncle. It was my father and myself from 1987 to 1992, when he retired. Our roots to Chrysler were through American Motors.
How long have you been on the dealer council?
I've been on the council since 2009.
What is the biggest issue facing the council?
The biggest issue -- and it has been for a period of time -- is the volume growth program. I don't know if we'll ever get it 100 percent resolved, but the program that launched last month for the dealers is going to be the most fair and equitable program for the dealers and the factory.
Do you believe small dealers are being treated equitably?
The way the council looked at it is not "Are you a small dealer or a big dealer?" but "How are you performing relative to your market?" If your market is 100 new cars per month but you're only selling 80, then you're underperforming. But if your market is 20 new cars per month and you're selling 25, then you're outperforming your market.
It's really the only equitable way to judge one dealer's performance against another's.
In 2012, after months of working with the dealer council, Chrysler agreed to change dramatically the way it runs the facilities portion of its dealer standards program and put a greater emphasis on customer satisfaction. How is the new program working out?
From a customer perspective, the customer really just wanted to be treated fairly, to be treated properly. I don't think they care at all if the tile in the dealership is lighter or darker than what is prescribed.
What about from the view of the factory?
I think the manufacturer wants to have an exterior look that is uniform across the country, and you can't blame them for that. But aside from that, once a consumer is dealing with dealership employees, those employees need to take care of the customer. I think Chrysler is there to help us do that, rather than dictating whether you have certain tiles or wallpaper.
Since it emerged from bankruptcy, Chrysler has been overhauling its product line and is introducing its first Fiat-based vehicles. What's your opinion of the products that are now on your lot?
Without a doubt, this is the best product that I've ever seen. Being here since 1987, I've never seen a Chrysler lineup that fits its customers like it's done today. I think Chrysler's done an outstanding job overhauling the lineup since 2009.
Are there any holes in the current lineup?
I always want to see continued development, and I don't think Chrysler's going to stop by any stretch.
Today's market is so competitive that every manufacturer needs to be re-evolving and re-evaluating its product on an ongoing basis.
Your dealership is on Long Island. What's your top-selling vehicle?
For us, it's the Jeeps. Long Island is definitely a Jeep market. To me, the SUV market is the replacement of the station wagon and the minivan as it has evolved. Especially the Grand Cherokee -- that's a big vehicle for us, and it's very popular with our female customers because it's not a large SUV that's impossible to park in the garage.
What are your thoughts about the Dodge Dart and how it has been launched?
That segment is extremely competitive and an extremely tough market to deal in. It's style-sensitive and price-sensitive. Chrysler needs to be there, but I think they're committed to that segment now, just by how well they've done with the Dart and how well they've put that car together.
Your predecessor as council chairman wanted to focus on improving franchise value. Is Chrysler doing enough to improve the value of its franchises?
The biggest thing is product. If they keep improving the product and improving the designs, then the value of our franchises will continue to improve.
I'm not one to shop it out because I don't plan on selling, but, yes, my franchise is more valuable today than it was last year.
AutoNation just purchased a Chrysler point outside Houston, and I think that's the first Chrysler dealership they've purchased in a while.
Many Chrysler dealers have seen their service revenues weaken because of falling warranty work over the past several years. Is that an issue?
I think the warranty work will grow as our volumes return. Quality has certainly improved, but we're selling more cars now. As sales volume has increased from 2009, I think the dealers will no doubt see an increase in service volume. I think we're through the lull.
As chairman of the dealer council, have you decided where you would like to concentrate your efforts?
With the January launching of the volume growth program, I'll be curious to see how it will pan out for the dealers and for the factory. That's going to be on the forefront, without a doubt.
Later in the year, as we transition into having a different preferred lender -- especially one that will do leasing and balloon notes -- I think the council will be focused on how it impacts the retail deals on a day-to-day basis.
Speaking of preferred lenders, does Chrysler need its own captive finance arm?
When Chrysler first came out of bankruptcy, not having a captive finance arm really concerned me. But having banks compete against each other has worked by getting the best lending arrangements for dealers that are out there.
From my vantage point, and the vantage point of most dealers, we just want to sell cars, and whatever makes that easier to do is better.
Do Chrysler dealers have any special concerns?
If you asked me that question three years ago, there would be a lot to say about it: paying back the government loans, Chrysler making money again, and grabbing market share.
I don't have another franchise, so I don't have anything to compare it to, but if we're grabbing market share in a market that's still growing, you have to feel pretty good about where we're going and what our future is going to look like.
You have a Fiat franchise as well. Looking back, did you make the right decision when you decided to open a Fiat salon?
We've had our Fiat franchise about a year and a half now. More product will definitely help.
When the four-door Fiat comes out in May or June, I think it's going to be a lift for the overall brand and the overall franchise.
Rather than just a one-car stable, we'll have a real offering to the public rather than just the two-door. I think definitely at that time, it'll make the Fiat franchise more viable.
Where do you think Fiat dealers stand right now?
I went into it hoping to break even the first few years, thinking that if I was able to do that, the franchise would make sense over the long term. I broke even last year, so I'm right on track.