DETROIT - DaimlerChrysler AG will work to strengthen its current dealerships and is not tempted to try Tulsa-like consolidations.
'We're very pleased with our retail distribution,' said DaimlerChrysler Chairman Robert Eaton. 'We're not going out buying up dealers. We still prefer to have individual entrepreneurs out there risking their capital alongside ours, as opposed to having professional managers running the business.'
John MacDonald, DaimlerChrysler's senior vice president of sales and service, acknowledged that this status-quo approach runs contrary to industry trends.
DaimlerChrysler will take advantage of 'the tremendous investment' of its dealers along with their knowledge and entrepreneurial spirit, MacDonald said.
But DaimlerChrysler is altering its dealer landscape. In 1991, Chrysler launched a plan called Project 2000 to consolidate all Chrysler-Plymouth dealerships with Jeep-Eagle dealerships. That project continues today, but probably will not be completed by the end of 1999, Eaton said.
Project 2000 has reduced the number of former Chrysler Corp. dealerships from about 5,500 in 1991 to about 4,500 today, Eaton said during a recent interview.
'We're on track to go to 4,000,' Eaton said. 'Right now we're facilitating the combination of dealerships; we're not putting any money into it.'
With these relatively good times, Eaton said, the process has gone a bit slower than he initially figured.
But consolidation is only one part of the DaimlerChrysler plan. The automaker is urging its dealers to earn certification as Five Star dealers. To do so, dealers must implement and sustain certain procedures and practices in their stores.
For example, at least 70 percent of a Five Star dealer's sales staff must meet minimum training requirements; sales and service staff must contact customers within a week of a vehicle purchase or service; and customer complaints must be documented, consistently reported to management, and resolved.
Initiatives like Five Star are important because most new-car customers want change, Eaton said. About two-thirds of the people that buy new vehicles do not particularly like the process, he said.
Said Eaton: 'So we are going to try to change what we have, as opposed to trying to invent something else.'