Dealers in the Northwest who want Chrysler Corp. to cap dealer allocations say they will try to recruit support from dealers across the country.
The group wants Chrysler to cap allocations for all dealers at 500 percent of each dealer's minimum sales requirement for his territory, unless surplus product is available.
Chrysler does not limit allocations. It provides dealers with vehicles as they sell or lease them, whether or not those vehicles are sold in a dealer's marketing territory.
Group members say the growth of large sales-oriented dealerships threatens the traditional local dealership, where customers can buy their vehicle and get it serviced.
'There is more interest in this than just these 22 dealers in the Northwest,' said Joe Billion, owner of J.C. Billion Inc., a Chrysler-Plymouth-Dodge dealership in Bozeman, Mont., and a member of the Denver Zone Dealer Council. 'We've been contacted already by dealers from around the country.'
Thomas Pappert, Chrysler's vice president of sales and service, declined to address specific dealer concerns, but said: 'Clearly we have to do something to pull out the thorn.'
However, no distribution system will satisfy all of Chrysler's 4,595 dealers, Pappert said.
The dealer group, in a March 14 letter to Chrysler Chairman Robert Eaton, said the existing allocation system is unfair. The dealers threatened to boycott select vehicles, file class-action lawsuits and favor local customers in their service departments if Chrysler fails to address the allocation issue by Aug. 1.
The group calls itself the Dealers for a Fair Allocation System. They are particularly upset that Chrysler allocates large numbers of high-profit Dodge trucks to Dave Smith Motors, a small dealership in rural Kellogg, Idaho. By using a variety of marketing techniques, Dave Smith Motors attracts customers from surrounding states.
'But the focus of our group is beyond any specific situation or dealer,' Billion said. 'I don't think Chrysler has accepted that this is a national problem.'
The existing system could breed a handful of major distribution issues fueled by advertising on the Internet, Internet buying services such as Auto-By-Tel and the emergence of large, publicly owned dealerships, Billion said.
Howard Sellz, owner of Valley Dodge Inc. in Van Nuys, Calif., is not a member of Dealers for a Fair Allocation System, but he agrees that Chrysler's turn-and-earn system should be modified.
CHANGING THE SYSTEM
A 'super marketeer' can ruin the market for the traditional dealers, said Sellz, a national dealer council member.
Chrysler wants to avoid confrontation, Pappert said.
'If something doesn't make sense, we'll fix it,' he said. 'If there is a more fair system, we'd do it in a country minute.'
Mike Grimes, president of Grimes Motors in Helena, Mont., said the group owes Eaton a follow-up letter signed by the dealers. The March 14 letter listed only the group name.
'There will be a follow-up letter with signatures, so Eaton knows whom to contact,' Grimes said. 'We won't let this slide.'